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As MIPIM Starts, Opportunity Lies East

MIPIM has finally begun. The helicopters and yachts made it through yesterday's winter storm to Cannes and even the CNBC crew -- on communal-garden public transport -- was a mere 7 hours late.

Now the 28,000 delegates can start to discuss the real issue of the day. Who will throw the most fabulous party? And more importantly: how the devil are they making enough money to pay for it?

From our broadcast position on the roof of the Palais des Festivales, overlooking the Mediterranean opulence and beaches of Cannes, it's hard to imagine anything but capital growth by the bucket-and-spadeful. But the returns in much of Western Europe tell a different story.

Our first guest of the day was Alstria CEO Olivier Elamine. A Frenchman in charge of a German real estate investment trust, Elamine is well-positioned to take a view on the market.

According to Elamine, the credit crunch is at the forefront of everyone's mind at this year's MIPIM and investors are keen to find reassurance that their own view on market outlook and their business model is the right one.

He also points out that even within Western Europe, the commercial property markets have diverged. In Alstria's home market of Germany conditions are still solid and the company's strategy of close-asset management is still paying off. But the previously lucrative London market is suffering.

But we didn't come here to find out how to lose money. What we really want to know is how to make it.

Apparently the answer lies east.

The next guest we welcomed onto the windswept roof of the Palais to share the view was Bill Kistler, European president of the Urban Land Institute.

A report by the institute released today shows that London, always ranked as one of the top two real estate markets, has dropped to 15th.

The big winners are Moscow and Istanbul. But investors looking to maintain big returns even in turbulent times risk getting their fingers burned by dabbling in risky markets they don't understand.

Kistler urges investors new to these cities to be aware of the idiosyncrasies of these new growth markets and seek experienced partners to help successfully tap the growth they offer.

And for those who aren't ready to branch out beyond the countries they know, Kistler says there's still value to be had in the second tier European cities, especially in Germany, where growth has been more modest than in the UK. Hamburg rates as the third European city for investment market prospects and fourth for its development outlook.

But don't write London off just yet. Once sentiment turns up again, as surely it must in the economic cycle, the UK's capital is likely to climb the ratings again. And with land values slipping and retail investor redemptions forcing fire sales, there are sure to be buying opportunities to be had and investors ready to take them.

Which brings us neatly to the next question: once we've identified the money-making opportunity created by this market disruption, who's still in a position to take it? Stay tuned to CNBC's MIPIM coverage to find out.