It’s mid-afternoon on the first day of Expo Real, Europe’s largest real-estate trade fair, and Marko Kauppinen is in the middle of delivering one of the more unusual pitches anyone has heard that day. “We,” the Finn tells a gathered crowd of men and women in suits, “are boring. Things that work are boring. Finland is a boring country. And boring is good for business.”
Kauppinen’s business card identifies him as a “city growth evangelist” for the Helsinki Ring of Industry, a network of 10 (presumably boring) towns on the outskirts of the Finnish capital. However, his jeans, polka-dot scarf and blond man-bun suggest his commitment to boring might not be wholehearted. This is his first time at the Munich convention and he’s hoping to attract investment from one or two of the thousands of real-estate professionals gathered here.
Every year Expo Real brings everyone from Barcelona to Burger King under one roof, with hundreds of cities, regions, real-estate investors, banks, hotel chains and other companies all gathering to talk shop. The massive booths and crowded halls resemble any other trade fair but with one marked difference: there are no goods on display and nothing tangible to buy or invest in.
Instead, Expo Real is more like a three-day networking event, helping players in a sector with a lot of moving parts find each other and figure out what’s on the horizon. From technology-oriented construction solutions to the next version of business hotels (see page 81), it’s a place where the seeds are sown for deals that may blossom months or even years down the line. “It’s not like a trade fair where you sell products and get a response a few days later,” says Burger King Deutschland’s Andreas Brinkmann. “Here it’s a long way to success.”
Glasgow is just one of the cities represented at the fair. It’s looking for help to redevelop its faded waterfront and this is an ideal opportunity to pitch itself at a high level. Anne Murray, who has been coming for seven years, says Expo Real is the staid Teutonic sibling to Mipim, Cannes’ annual real-estate extravaganza – and that’s why she likes it. “Mipim is more razzmatazz. Talks with German investors here are short and sharp,” says Murray who, as the city’s inward-investment manager, decided to expand the size of its booth this year. “Expo Real is taken more seriously. People come here to do business.”
And there’s plenty of business to be done. More than 44,000 people came to Munich in 2018 – its biggest crowd yet – drawn by years of strong growth in the European real-estate market, fuelled in part by a decade of cheap credit and uncertainty elsewhere in the world. This meant that in the first half of 2018, global real-estate markets turned in their strongest performance since 2007, according to investment management-company JLL. In a pre-fair survey, 66 per cent of respondents were upbeat about the conditions facing the sector.
It helps that Expo Real is heavily focused on the German market, with ample representation from neighbours such as Poland, Sweden and the Netherlands, all nations with strong, growing economies and comparative political stability. “Because of all the chaos in the world, Germany is, more than ever, a safe haven,” says Matthias Pink, Savills’ Germany’s head of research, who says that sure things such as logistics hubs – warehouses and distribution centres located close to major population centres – are particularly hot right now. “There’s a lot of insecurity in the global market and investors are risk-averse. The fundamentals are very good at the moment. There’s a lot of money looking for opportunities – and opportunities to invest are rare.”
That helps attract first-timers to the fair, including folks from capitals such as Sofia and Riga, as well as more off-the-beaten-track cities. Vojvodina, Serbia’s northernmost province, sent representatives in colourful flowered scarves to promote the region’s “EU adjacent” benefits. Shared borders with four EU members, coupled with cheap costs, make the province convenient for manufacturing and logistics, says spokeswoman Katerina Ivezic. “Transport is accessible and cheap, and taxes are lower than in the EU.”
One major change at the Expo is the increasing attention to technology. Whereas the sector was once on the margins, since 2017 the trade fair has devoted an entire section of the programme to new technology, with offerings ranging from major players with millions in venture-capital backing to tiny start-ups. In the Innovation Forum, potential customers and investors chat at wooden tables with technology-company owners hoping to break into the real-estate space. One firm is offering drones to make building inspections cheaper, while another is selling virtual-reality tours of construction projects based on blueprints. It’s a sector with enormous potential: more than 70 per cent of the real-estate industry sees so-called PropTech as a key opportunity, according to a KPMG survey.
One of the companies generating the most buzz is Berlin-based 21st Real Estate. At its booth, staff explain how they use data – from preschool density to proximity to organic markets – to predict how much an apartment might sell for in any German city. “Nearly everybody with a booth here is a potential customer,” says CEO Petr Bradatsch.
By late afternoon the convention overflows outside, covering the grass in a sea of blue and black. Cards are swapped and deals discussed over Bavarian beer in the autumn sun. “You can sit in the office and stare at the phone,” says Kauppinen as he surveys the scene. “Or you can come to something like this and take a chance.”
The new business hotel
Spanish hotel firm Meliá specialises in all-inclusive beach resorts in Spain and further afield. But its booth at Expo Real was dominated by Innside, a decade-old brand aimed at young business travellers. Meliá executive Pilar Serra Colom says that the chain is hoping a younger, fresher look will attract interest from developers looking to add hotel properties to their urban projects. “If you want to grow, you have to adapt,” says Colom.
Innside was just one of the “business casual” hotel offerings at the Expo. Amid the rise of savvy, fresh-faced chains such as CitizenM, newer brands such as 25Hours, Me and All, Premier Inn and Innside are all part of an effort by major hotel companies to capture the attention of a younger breed of business traveller. Central, high-traffic urban locations are considered key, along with plenty of sockets for gadgets and laptops, plus café-like common spaces to lure business travellers out of their rooms. (Moxy, Marriott’s bid for a boutique hotel brand, seemed to be basing its pitch on the smell of pink-frosted doughnuts.)
For developers, this new breed of hotel is easier to cater for than their sprawling, up-market cousins. “A four-star hotel is a challenge in the real-estate market because of the high floor area,” says Chris-Norman Sauer, Premier Inn’s head of acquisitions. “People don’t need a 30 sq m room.”