As a Real Estate recruiter, clients and candidates alike often ask us; “is the market improving...?” As a real estate and infrastructure sector specialist recruiter we are well placed to see what is happening. As a result we can offer a balanced view of the market to those working in it.

There has been much media attention on the listed recruitment agencies reporting massive increases in year on year Banking and Finance revenues - in some cases this being interpreted as a mini City hiring boom. Yes, hiring activity is thankfully much increased, even in the badly damaged Real Estate sector but this is simply compared to 2009 which was an extremely challenging year on all fronts. While we aren’t seeing the levels of activity we saw during 2007 we are seeing a marked improvement on last year’s levels.

A good example of this is with the investment funds. Whilst a number of our clients were successful in raising new funds during 2008, 2009 proved to be a difficult time to close investments. Last year saw the flow of credit diminish, which naturally resulted in an increase in the cost of financing. This, coupled with a disparity in asset prices between buyers and sellers, made it difficult for our fund clients to close transactions. In addition to these problems, fund managers looking to raise new equity found institutional investors reluctant to deploy their capital. Flash forward to spring 2010 and the ‘green shoots’ that were being mentioned 12 months ago, really are starting to appear.

A clear indication of this is the amount of new equity that is being raised across both real estate and infrastructure.

Along with an increasing number of UK opportunistic funds being established and going forward, clients are looking to establish core European real estate funds. This increase in European activity has been fuelled by the general feeling that the majority of the European real estate market has bottomed out, as result creating opportunities for investors. As institutional investors are looking to place equity into real estate funds, we are seeing an increasing demand for experienced fundraisers, in addition to candidates with tax and legal real estate finance experience.

Another MIPIM is upon us and whilst the champagne corks won’t be popping with the disregard of 2006/2007 the consensus is that the outlook is brighter than last year.

While the property bankers will be attending in much smaller numbers than in previous years, some real business gets done at MIPIM which will have a positive knock on effect for the banks.

We all know property is a people business driven more by characters than perhaps any other asset class. It’s these colourful entrepreneurial people that make it such an interesting sector to be in, regardless of the tough times that we now find ourselves in..

Business gets done at MIPIM because networking and meeting with like minded property professionals breeds ideas and gets deals done. There maybe a place for the conference formalities but one gets a sneaking suspicion that the real opportunities are formed in the early hours in the bars along the Croisette.

As a recruiter with a global view we find MIPIM a useful forum to meet up with all our clients in one place in an informal setting and perhaps even arrange the odd interview!

Regarding the recruitment market, we are happy to report that some natural attrition is returning to the jobs market, where professionals are looking to move for the purposes of career progression now that an element of the fear factor has begun to lift and confidence returns. While this shift has taken some time in the banking sector, the salary freezes and lack of promotional opportunities of the last few years have also led to movement in the market and disappointment for those firms who have yet to look at their remuneration and retention plans.

Ciara Murphy

cmurphy@cobaltrecruitment.com

The property market in general was very glad to say goodbye to 2009 and hopeful about what 2010 would bring for its participants. The last eighteen months have been disastrous for the sector and the pain continues. While some are predicting that we are at the bottom of the cycle, that capital values are increasing and the worst is behind us, others suggest that these values are being falsely inflated, are unsustainable and point to a ticking bomb which will cause great damage in the future when a raft of large CMBS deals will need to be refinanced.

Many observers predicted that 2009 would see fire sale activities with the banks taking possession of properties and selling them to attempt to recoup their losses. Investors prepared to swoop, but as asset values had taken such a battering, this did not happen as banks were understandably reluctant to crystallise a loss and so held off from taking action. While it seems that the banks in general have been slow, (and perhaps now it would seem, wise!) to tackle the problems lurking in their loan books, there are now a number of banks engaging property companies to work with them on various deals and portfolios with the aim of protecting the asset and extracting value in the longer term.

New lending remains relatively low; despite the number of banks with an appetite to lend against commercial property increasing, there is a serious lack of product in the investment market.

The recruitment market is certainly showing signs of improvement with increased activity in most areas and while it is very easy to buy into the optimism, this must be tempered with reality. The increase in activity is encouraging when compared to the first half of 2009 but is in no way indicative of a healthy recruitment market.

Hiring continues to be selective and in contrast to the exuberance of 2006/2007, the number of candidates still vastly outweighs the number of roles available. As such it remains a buyer’s market for labour, with clients who are actively hiring getting greater value for their money, as candidates’ expectations in terms of package and role have become more realistic.

So where will we see hiring activity in 2010? Increased lending has not translated into recruitment of origination/ business development specialists and is unlikely to do so in any volume in the short term. Hiring across support functions including credit and risk management and administration has increased slightly but is still slow.

Recruitment in real numbers is only really occurring within the large commercial banks which are leading the way by ramping up their Real Estate restructuring teams. While the trend initially was to move existing staff internally, now that this transfer of talent process is complete, appetite to recruit externally is on the up.

Given the length of the last Bull Run in property, there are a limited number of candidates with vast experience in restructuring and workouts, but demand for strong property professionals with the technical skills and commercial acumen to realise value for the banks is on the increase.

There are reasons to be positive, but overall 2010 will be another challenging year for our sector!

Ciara Murphy

cmurphy@cobaltrecruitment.com