For the 18th year in a row, veterans and virgins alike converged on Cannes March 13-16 for MIPIM — “The World's Property Market” — the largest international commercial real estate conference in the world.

MIPIM is deafening, crowded and highly productive for deal makers. That's despite its coastal setting in the Palais des Festivals exhibit hall, the site of the Cannes Music Festival. That implies palm trees, six-foot stunning blondes and redheads, outdoor cafes skirting ancient buildings, and yachts as far as the eye can see.

Against this backdrop, and with a record attendence of 26,000 business people smartly dressed in dark suits accented with high-tech cell phones, a few compelling themes emerged.

Perhaps the most surprising takeaway was Germany's rise to prominence as a European investment market, now second only to the U.K. Primarily due to German open-ended funds actively selling assets and creating new investment opportunities, the recovering economy in 2006 increased investment by 150% over the previous year. Real investment sales grew from just 30 billion euros in 2005 to 51 billion euros in 2006, according to a report by CB Richard Ellis released at the conference.

Russian splash

While Germany's numbers quietly impressed, the Russian contingency made its presence known through extravagant booths and hospitality. There were roughly 30 Russian regions represented. Often shunned by U.S. investors as a market pocked with dangerously high risks — and returns — Russian exhibitors came up with some compelling arguments for investment this year.

There is one overriding truth — investors see Moscow, and then there's the rest of the country. According to developer Michael Golomb, CFO of Moscow-based JSC Sistema-Hals, the fact that Moscow's real estate quality lags major European capitals creates redevelopment opportunities in office, retail and hotel. Consumer spending in the capital city alone, said Golomb, is also approaching Western levels and ranks fifth among European countries, just behind Spain.

“They're developing businesses in Russia that are going to be substantial players on the world scene,” said Bruce Mosler, CEO of Cushman & Wakefield. The giant New York-based brokerage bought real estate services company Stiles & Riabokobylko in Moscow two years ago. Since then, the local brokerage has quadrupled in size largely due to growth in agency leasing.

“You have to quantify the risk but it is a place that you must be, particularly as debt becomes an important component of the overall financial marketplace — and it will. That will allow players to leverage and diversify.”

Making your presence known

A key question for companies at MIPIM was how to cut through the sheer noise and volume to get noticed. For Cushman & Wakefield, tactics ranged from a large red banner prominently displayed on the side of a building facing the plaza in front of the Palais, to hiring a pleasure boat called “The Perfect Persuasion.” The company made a strong showing with more than 170 employees.

“I had not been to MIPIM for almost 10 years until last year,” said Mosler. “I was absolutely stunned by the number of senior executives from around the world who were actually participating in deal-oriented conversations.”

In addition to lavish parties, for which fresh flowers were ferried about like telegrams in war time, many exhibitors chose to employ full coffee or alcoholic bars. The Dubai exhibit was a perfect example: Drink in hand, potential investors roamed around the booth and admired expensive models of current and future projects.

Representatives from 83 countries were in attendance. John Campbell, president & CEO of Toronto Waterfront Revitalization Corp., for one, spent his time touting a massive $17 billion-Canadian mixed-use development that seeks to revitalize Toronto's central waterfront.

What does Campbell want American investors to know about the Ontario market? “We have the hottest condo markets in North America,” he boasts. “We absorb about 12,000 units per year on average.” Toronto enjoys low labor costs, declining commercial real estate taxes, and office vacancy rates around 8.6%. Taken together these factors may make the city one of the best kept secrets in first-world emerging markets.

Sibley Fleming is managing editor of National Real Estate Investor. She is also the author of seven books. She can be reached at sibley.fleming@penton.com.