CORRECTED - PREVIEW-Property speed-date over canapes at MIPIM

(Corrects spelling of MIPIM in headline)

* Europe's largest property convention begins March 8

* 18,000 delegates due to attend events at Cannes, France

* Red tape, asset sales, debt availability key issues

By Andrew Macdonald

LONDON, March 8 (Reuters) - For three days only the bigwigs of Europe's commercial property industry will hold court this week on the French Riviera to debate how far the stricken asset class has rebounded from recession, and the hurdles that remain.

This year's MIPIM (Marche International des Professionnels de l'immobilier), from March 8-10 at Cannes, will be the industry's equivalent of deal-making speed dating, with the spectres of scarce debt, asset sales and red tape in focus.

"The big questions are still going to be where debt capital is going to come from, whether funding sources like CMBS are going to come back, and more importantly when are banks going to start selling those property assets" said Barry Osilaja, director of structured debt at Jones Lang LaSalle (JLL.N).

After more than three years of global financial crisis driven woes, the commercial property industry is still waiting for debt-heavy European banks to sell off distressed assets, easing inflated prices caused by high demand and low supply.

Property investors such as real estate investment trusts, pension funds, sovereign wealth funds, private equity and insurance companies again have pots of cash for acquisitions.

"The capital needs to find a home," said James Darkins, Henderson Global Investors' (HGGH.L) managing director of global property. "What we saw leading into the downturn the last time around was that capital lost its 'discretion', its ability to differentiate between good and bad assets."

Now, property investors are increasingly talking about eking value from so-called top-quality secondary real estate -- well-located assets that need development to turn them into prime -- to compensate for lack of blue-chip assets being sold.

Angus Henderson, F&C REIT's (FCAM.L) business development head, said against this backcloth, 2011 would be a year of slim capital gains and better income returns, noting there was a divergence on whether property was a viable inflation hedge.

"I think a lot of investors are not saying you have to do 15 percent (total) returns -- their focus is more on (building) a strong, steady income approach," Henderson told Reuters.

"MIPIM is a good opportunity to meet investors ... Not just the big pension funds, but family offices and wealth managers. It's also about understanding joint-venture partners, and where there is new opportunities to form joint ventures," he said.

Aside from poker-faced, closed-door business meetings, delegates will again be exercising their expense accounts on swanky parties with cocktails and canapes, trying to convince rivals that their downturn woes are long gone.

RED TAPE BLUES

A looming wave of regulation will also dominate formal and informal discussions at MIPIM, which will draw about 18,000 delegates, particularly the yet-to-be divined effects on the European commercial property industry.

"As an overriding theme (for MIPIM), there's one word that springs to mind, which is 'uncertainty' on the regulatory front," said Gareth Lewis, finance director for the European Public Real Estate Association (EPRA).

The global banking industry's Basel III rules, the insurance sector's Solvency II, and the EU's Alternative Investment Fund Managers (AIFM) Directive will be implemented from January 2013. The European Market Infrastructure Regulation (EMIR) will become effective by the end of 2012.

Basel III and Solvency II introduce stricter capital requirements. AIFM requires funds to register and report data as well as meet capital rules. EMIR will improve the transparency and trade of interest rate swaps, a key property industry tool.

"I know for an absolute certainty that we have clients who are reserving investment decisions, and that this is particularly in respect to Solvency II," Darkins said.

"These guys are in the business of return on equity and risk-adjusted return on their equity, so, for sure, many of them are waiting to see what happens with the regulations." (See www.reutersrealestate.com for the global service for real estate professionals from Reuters) (Additional reporting by Daryl Loo; Editing by Karen Foster)