MIPIM: FDI expanding scope to encompass more real assets

Ismail Ersahin (L), Courtney Fingar and Real Asset Media’s Richard Betts.

The interests of organisations promoting foreign direct investment and the real estate sector are intersecting more than ever and Ismail Ersahin, CEO & executive director of the World Association of Investment Promotion Agencies (WAIPA) said that there is “a clear opportunity to work together”.

Speaking at Real Asset Media’s FDI Locations Networking Breakfast event at MIPIM, he said:  “together, let’s enhance the corporate capacities of investment promotion agencies in order to create a more business friendly environment and to make sure that we can promote, facilitate and advocate more sustainable investments, which are our future.”

However, he added that many companies and investors are not sufficiently aware of the potential and opportunities that investment promotion agencies provide.

“We have to let investors know about IPAs, that’s something that we will have to work on,” he said. “They are there to help you, to be the public/private sector face of their government’s thinking.” And he added, “Unlike traditional bureaucracy, they are happy to help you, to make life easier for all investors.”

FDI specialist and Real Asset Media contributing editor Courtney Fingar said that the environment is “a little bit wild” for FDI at present.

“Obviously, we were all geared up for the big post-covid rebound in terms of the numbers, and things were looking fairly rosy last year but the momentum of the recovery came under threat.” The war in Ukraine, geopolitical risks, inflation and interest rate movements are among the threats.

“However, there are opportunities in some of this wholesale reallocation that we’re seeing.” One example is the nearshoring trend and friendshoring trend that has resulted from supply chain disruptions.

“Supply chain changes and disruptions are opening up a wealth of opportunities for locations to be new logistics hubs, and we’re seeing a lot of activity in industrial warehousing and other types of logistics- focused real estate.”

She said another major trend is that the remit of investment promotion agencies is widening. It is going beyond purely focusing on Greenfield FDI, which “doesn’t really cut it anymore, because there needs to be investment in real estate, real assets, infrastructure and things like that to support your overall economic development goals.”