Cannes 2009: Free lessons for the ones who want to learn…

Monday, March 16th, 2009

While I was … raped again (paying for gold each and every extra kilo I had in my luggage), my brother Grigoris was still at our stand, instead of enjoying the warm Friday’s sun. I was traveling back to Bucharest (with the super expensive Air France and its nice empty planes with the very polite flight attendants), while he was returning back to Thessaloniki, together with two very good friend of ours. He was flying by Swiss, few hours after me, so he decided to stay at our stand as much as possible. (We usually have this habit as family, we don’t abandon our work for fun and we are very proud of that).
So, at a partially destroyed area, with everything at our stand being packed and removed before and almost everyone around him being gone since hours, Grigoris saw a gentleman coming to him. It proved out to be a major international player, representing one of the top firms of architects in the world. They had an interesting discussion, but this is not my point. Just think about it: The last day of MIPIM, while people were away and workers had already started deconstructing the stands, some “big bosses” were walking around, checking stands, companies and ideas, searching for a potential lead for business and deals. Last year, they were all gone from the previous night, having headed to Monte Carlo or Monaco, to enjoy their weekend. This year we saw many “big names” present even until the last moment…

Officially -30%…
MIPIM is represented in Greece by Mrs. Lita Borne. She is one of the oldest of the organizer’s stuff and be sure she deserves to work with them all these 19 years. She knows her job pretty good, trying all the time to keep every client satisfied, creating personal connection with him / her. She knows that “Client is the king”. This is why she has “devoted” clients for many years and she is very popular between all the Greeks who visit one of the exhibitions of the organizer, MIPIM, MAPIC etc. (This is why I decided to collaborate with her and not the person in charge of Romania – I don’t know him actually).
So my adorable friend, Lita, came to us the last day, so as to inform that more or less the figures this year were 30% less comparing to 2008. I had no reason but to believe her, this year MIPIM reached some 18.900 – 19.000 visitors, being still the no. 1 Real Estate exhibition in the world. But this time it was obvious that many people were missing… Especially the investors and several major exhibitors, developers or others, the ones transform this exhibition to a unique event.

… I met 80% less people comparing to 2008…
In the same time, this year was very quiet for my company, MORE International Invest. With bigger stand, better location and design than 2008, we finally met about 80% less people comparing to last year. Of course, I didn’t accept this pathetically, I walked around the Palais de Festivals, and met some very interesting people and probably I will have couple of good agreements coming out of these “short tours”. Also as we learned how to work good as a team, I didn’t have the fear to leave, whenever I needed it (trust me, its more difficult than you think… a big thank you to my brother Grigoris and our colleague Daniela, it is good to feel that they back you up when you need it).
This free time allowed me to have longer conversations with almost everyone. I could add the word “deeper” ones too, with more time to focus on the details and to understand better what was the real interest of the person sitting at the other side of the table. You know, when there is almost a queue of people waiting, you are happy to talk to all, you try your best, but there are always misunderstandings, people who couldn’t wait more etc. This makes me say that if we would have had double number of meetings (so just -60% comparing to 2008, instead of -80%) we would have been very happy and the situation would have been almost ideal.

… but the quality and the potential is probably double!
I don’t want to sound grumpy. Even if the number of meetings was dramatically reduced, the quality of the people I met was more than enough to make me happy. While in 2008 there were plenty of guys, some of them really interested and many others just spending their time, this year I met almost only very serious businessmen, major companies, who know very well what they want and why they are in Romania. Ok, some of them were searching for opportunities with “0 price”, but in general they knew what they can find today, they have a strategy and their steps look well prepared and organized.
This world crisis gave us the chance to welcome at our stand people who would never come the previous years (they would be too busy and too sure that they receive the best services). Looks like there are many complains around, which creates opportunities as well, for the ones who didn’t get involved in “strange” stories. It is obvious for me that not only I don’t comment about the past, but also I respect clients in the same way, either they did business before with us or not. The client is always free to work with whoever he likes and even when he leaves to us just his… dust (from his shoes) this is a profit too. But except their dust, most of them had to contribute much more in our discussion and in a potential future deal.
Even the Romanian journalists who came to our stand were more relaxed this year and we had the chance to discuss in a civilized way. They didn’t have to run after 40 – 50 people in two days (last year’s story) plus most of the people avoid talking officially now.
Looking at the total overview of 2008 and 2009, I would choose this year comparing to the previous one, because the quality was probably double and the potential looks more fruitful. Does it sound weird? Tomorrow I will explain to you why…

Last Monday I described to you that this year the interest for investments worldwide and especially for Romania was significantly lower than the past. This was something we all expected. But we didn’t expect to have 70-80% less meetings than 2008 (my company’s figures). This happened while in the same time the quality of these meetings was very high, creating a positive outcome (at least this is my approach). So, after all, what are the lessons that MIPIM taught us this year? (for me who paid to be there, cost a lot, but you can receive my opinion for… free):

- Romania is not the centre of the world anymore. In 2007 and 2008 the majority of Romanians and many foreigners got the impression that the whole world will be begging them forever, so as to buy properties here. That the clients would be waiting in the queue for years, until the intelligent owner would decide to finally sell his property in an incredibly high price. They thought that they had the gold, that they owned the only investment choices for the investors all around the planet. When the prices in the major western cities had reached the sky, many people considered attractive even the crazy prices of some properties here. This is why we even heard and saw many owners comparing their properties with the ones of Paris, Prague, Los Angeles, or Athens… Well, guess what, this story has ended, or as Bags Bunny was saying “That’s all, folks”.

- Clients need strong reasons so as to return in Romania. The planes fly half empty, without carrying thousands of investors in them, the hotels struggle to maintain their occupancy rates, the transactions are much less than the past. Arrogance is punished and this time is punished for good. With the prices in London, Paris, Munich and New York being lower than Bucharest, why someone to come and invest here? (Correct, he can invest when he will find here many good properties, with excellent potential, in much more attractive prices). For the moment Romania is considered an overheated market, but in the same time, almost everyone recognizes that Romania will recover soon, if and when the prices will become again “more real”, the offered product will improve, while more professionalism and transparency will take the lead. So the future can be bright, but only if we will approach the market and the clients with respect, which we lost in the previous years.

- Everyone is asking for opportunities. Now no one is asking for properties in general. All investors consider obvious the fact that we will find them excellent assets and they focus on their prices. They can move on only when the prices are really low and this is something which they specify to you starting with the very first words of a discussion. The dreamers who still expect clients to return and pay huge prices will wait a lot of years…

- Catalogues of properties are no longer useful. No one really cares, no one asked, no one wanted. They all knew that the real opportunities are not printed on catalogues which are distributed at exhibitions and they were very straight: They told me what they wanted and asked me to adjust to their demands and priorities (something I consider I do quite successfully). Clients are more flexible now, faster to decide and willing to move quickly, for the excellent deal. The initial information is very important, the “wrapping” can follow. Also most of them show really very little respect to “great analyses and market studies” of the past. Now they search for more “real figures”, as they know how many investors were tricked by “unreal predictions and market studies”, signed by “top people” (most probably unemployed today).

- The big players start investing NOW. I spoke with several clients, funds, companies, individuals, who are interested in investing NOW, in the period of the next 3 - 12 months. This strategy is not implemented only for Romania, but for properties all around the world. They consider that as the crisis will go on, until to reach bottom (I was saying in the first half of 2010, most of them agreed more or less, with few months’ difference) there will be plenty of opportunities for successful investments. They search for excellent assets and they are determined to proceed, rejecting everyone who doesn’t respect the fact that they are the clients and they have cash = they have the upper hand, they are the kings.

- Western Europe rebounds. They know how to make business, they have strategy, vision and know how. It is not difficult to understand why many healthy companies from Western Europe search NOW the Romanian market. Retailers or investors, Germans or French and Belgians, there are plenty of them, who considered ridiculous the prices of the last two years and now they want to be present in the future of Romania. It is our capability and respect which will make them enter and invest their hundreds of millions in the near future.

- Russia, Dubai and other ex “strong Real Estate markets” are severely hit. The companies from Dubai were not even present this year, comparing to their dominance in 2008. Last year, Russians had thousands of sq.m., almost all possible advertising banners everywhere at Palais de Festivals and around the city and of course the sponsorship of the first day’s gala. This year we saw few stands, nothing extraordinary. The crisis is here, changing the world, the priorities of investors and the potential of countries, cities etc. (Russian clients? This year this was the shortest joke, we didn’t find not even ONE interested and present there…)

- Time to network – the big bosses show us the way. 2008. If you wanted to have a meeting with a boss of a big company, you had to apply for a meeting. If this application was approved, you would be informed to go to his stand. There usually you would find out that there were another two – three minutes scheduled in the same time. Sometimes you would not be able to meet him, not even for 1 minute. Everyone was proud and busy. 2009. Half of the last year’s bosses were not even present at Cannes. Their companies’ stands were usually empty, you could see people even looking at you and hoping that you want to meet and talk to them. Many CEOs and bosses were walking around and they were searching the exhibition stand by stand, so as to meet someone with good potential, so as to do business. So, most probably they were coming to your own stand, if you were present. They were friendly, open to discuss and ready to grab even the smallest possibility of a lead which could be transformed to a deal.
The message must be clear. Forget about the behavior of the past. If you want to save ourselves, let us network together. Let us meet, discuss, search for solutions, share clients and properties, information and rumors. When the top ones do like this, we should follow, avoiding the typical approach here in Romania of “fitze”.

- Quotes by Jean Claude Goldenstein, founder of the CREOpoint.com. This gentleman replied to my brother after MIPIM, having sent to him some very interesting quotes which he collected during the 4 exhibition’s days. I thank him, copy and share them with you too:

- “When the going gets tough the tough get going…To the south of France!” Boris Johnson, Mayor of London
- “We are all feeling the impact of this new world order where what happens in a blink may affect our lives and those of our clients.” DLA Piper
- “There were two kinds of people at MIPIM. Those complaining about the lower number of visitors, and those happy with the higher ratio of C level people there.” Magnus Svantegård of Datscha
- “We feed our investment team prozac on a regular basis.” Janice Stanton of C&W
- “Ready to kick assets.” Laura Chesters of Property Week
- “It is not the strongest of the species who survive, or the most intelligent, but the ones most responsive to change.” Charles Darwin quoted by Robert Newhart of Innovation Center
- “There’s no talk about sovereign funds or Russian oligarchs compared to last year.” Dietrich Heidtman of Morgan Stanley
- “When money no longer controls your culture, there’s room for new ideas to establish themselves.” Wolf Priz, leading architect
- “Everyone tells me about the crisis; it was important to prove to the contrary.” Alain Juppe, Former French Prime Minister
- “The era of me is over – the era of we is here.” Michael Buckley’s mega-mixed use session
- “2.5 billion people have suffered through disasters in the last 30 years. How could your skills help?” RICS www.buildaction.org
- “The US government should stop saying they will sweeten the pot. No one wants to be seen as a premature ejaculator.” Ken Patton, Dean New York University RE Institute
- “Be open to new people, everyone is in the same boat today.” Steve Felix, Aviva
- “The immediate future is very much in the hands of our banks and the success of our government support.” Nigel Roberts, JLL

- “Question: “What can I do for you?” Answer: “Pay my mortgage!”

Cannes 2009: Free lessons for the ones who want to learn…

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