Real estate titans are looking for clues in Cannes for a shift in the property market.

The global real estate industry is looking for reasons for optimism during the biggest crash in a decade, with developers and investors talking about the prospect of recovery - just not right now. Commercial real estate (CRE) as a whole has suffered losses, and developers are now pondering what to do with offices devastated by the pandemic.

At the real estate conference MIPIM taking place this week in Cannes on the French Riviera, delegates are gathering around miniature models of planned constructions and meeting with clients on company-chartered yachts. Many are discussing the market's implications, while others are trying to close deals. Several of the largest real estate investors, including American giants LaSalle, Greystar, Hines, and Federated Hermes, as well as French AEW and German Patrizia, told Reuters that they are seeing signs of a recovery in transactions.

Nevertheless, some are exercising caution. "There is a lot of hot air circulating along the Croisette," said Philippe La Pierre, head of LaSalle Investment Management in Europe, at a conference, referring to the beachfront promenade in Cannes where realtors are crowded together.

Despite this, some investors believe that a turnaround is near if central banks start lowering interest rates, easing the debt burden on companies. In Europe, the value of commercial real estate fell by 13.9% year-on-year in the fourth quarter of 2023 - the largest decline since the global financial crisis of 2009, according to data from MSCI Real Assets.

A large number of investors are trying to avoid losses by staying on the sidelines. The volume of commercial real estate transactions in Europe fell by half in 2023 to 166 billion euros ($181 billion), marking the worst year for office sales in history, according to MSCI, which has been collecting data since 2007.

Despite this, some investors believe that a turnaround is near if central banks start lowering interest rates, easing the debt burden on companies. "Overall, there is a renewed sense of confidence and excitement for the upcoming year," said James Seppala, head of real estate in Europe for the world's largest commercial real estate owner, Blackstone, ahead of the event. "We have been active in recent months and will continue to look at this."