Whether it’s investment, tenants or talent, the flow of overseas enterprise into the UK is vital. Looking back, this September may come to be seen as a watershed moment in demonstrating that the UK remains open for business.
In the past couple of weeks in airports on either side of the Atlantic, institutional investors have crossed paths with investment agents. The main board directors of REITs have been on global investor roadshows. Developers and landlords have been polishing presentations at 35,000 feet.
Politicians too. London mayor Sadiq Khan did his reputation the world of good on a tour of Montreal, Chicago and New York to show #LondonIsOpen. Throwing out the ceremonial first pitch at a New York Mets game – or ringing the closing bell at the New York Stock Exchange – may have been (clever) PR stunts, but signing a tech agreement with the mayor of Chicago may prove more substantial. Chicago-based companies invest and expand into London more than any other global city, according to London & Partners. This was on the back of a joint announcement with WeWork that it intends to double its London presence by the end of next year.
Hours later, also in New York, prime minster Theresa May used her first address to the United Nations general assembly to stress that the UK would remain “an outward-facing, global partner”.
These messages, so far at least, seem to be hitting home.
Estates Gazette ran its own investment mission this week, taking a group of UK developers, investors and advisers to Toronto and New York.
In Toronto one of the biggest Canadian pension funds, HOOPP, which has C$1bn invested in the UK, said it was sanguine about the effects of Brexit and committed to its programme – which runs from City offices to Midlands industrial units – for the long-term. Others we spoke to felt the same way and communities secretary Sajid Javid, who also joined the mission, did a compelling job in convincing them of the UK’s enduring attractiveness.
By the time you read this the mission, supported by Savills and the Department for International Trade, will have wrapped up in New York. I expected to hear the same message from investors at our event in Sliverstein Properties’ 7 World Trade Center.
So what needs to happen to turn these warm words into action?
Well, a commitment to London from a decent-sized occupier like Apple would help. Some may play down the decision by a big tech company to go to, say, Nine Elms, as mooted. Whether or not the draw is the UK’s relatively attractive tax regime, it would be a powerful and much-needed endorsement of London’s credentials and its talent pool.
Further sizeable commitments from domestic investors such as M&G Real Estate, whose head of UK residential investment Alex Greaves was on this week’s EG investment mission, will also boost confidence. This week the fund manager revealed its debut investment in the Manchester rental market after agreeing to forward fund Mulbury’s £27.6m, 135-home development on the edge of the Northern Quarter.
But any normalisation of deal volumes won’t happen until there is more certainty around the terms of Brexit and assurances around passporting rights and other rules. And that is where there is perhaps the greatest vulnerability and opportunity. Almost 5,500 UK financial services businesses rely on corporate “passports” to conduct business across the EU, MPs said this week. Their size and scale – and the number of professional services business which feed off them – highlights how important negotiations are over the months ahead to ensure the UK stays open for business.
Congratulations to all the winners at this week’s Estates Gazette Awards. More than 70 judges pored over a record number of entries to deliver their verdicts and almost 1,000 people were at London’s Grosvenor House hotel to celebrate. If you didn’t quite manage to win this year, there will be further chances to pick up silverware. Next week judging for the MIPIM UK Awards, run in partnership with Estates Gazette, takes place. Watch this space.
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