The fear surrounding coronavirus is spreading faster than the virus itself – and could ultimately have more serious implications.
For the property industry, the short-term impact hit home when news broke that the virus was spreading more rapidly outside China than within and reports started to circulate that big companies were reviewing whether to attend Mipim and many had pulled out. As someone tweeted: “27,000 real estate bods crammed into a few square metres shaking hands and kissing each other (well the Italians and French anyway)… what could go wrong?”
It is little wonder that as Property Week went to press, speculation was mounting that the event might not go ahead. It is difficult to know what to advise the team. We joke that there are worse places to be holed up for a few weeks than Cannes, but no one wants to fall sick or, worse, return home and spread the virus to a vulnerable family member or work colleague.
It is harder still to make the right call when the situation is evolving so rapidly. Earlier this week, one of the team went on a short skiing trip to northern Italy, around 100 miles away from the coronavirus outbreak. At the time, the government wasn’t advising against UK citizens visiting the region, but within 24 hours of her departure, the Foreign Office advised against all but essential travel to the region. She is supposed to be attending Mipim.
The spread of coronavirus does not just have short-term ramifications for events such as Mipim. It also presents a major long-term threat to the global economy. It has already brought the Chinese economy to its knees, with retailers closing stores, manufacturers halting production and foreign airlines suspending flights to mainland China – even Disneyland closed its parks to visitors.
Fears are now mounting that the stagnation of the Chinese market could push the country into recession. There is also the question of what this all means for exports of raw materials from China, which parts of the UK construction industry rely on.
And what about the Chinese pound? There are anecdotal reports of a sharp decline in footfall of Chinese shoppers at Bicester Village, said to be the second most visited destination for Chinese tourists after Buckingham Palace.
Many are playing down the immediate threat. Unite says international student reservations are holding up at the moment, but that it is “monitoring the risk”. As Property Week went to press, Mipim organiser Reed MIDEM maintained that the event would go ahead as planned.
Like everyone, they are monitoring the situation daily. But the grim reality is that even if the risk to people’s health has been overstated, as some suggest, the damage may already have been done. Look at how much the global stock markets have fallen this week.
If we are now on the cusp of a global pandemic, it could have devastating implications for the global economy. One senior property finance source goes so far as to say that he fears coronavirus will cause a global recession by the end of the year. I hope he’s wrong, but as with the virus itself, we may have passed the point of no return.