The government’s focus on large-scale infrastructure projects has missed opportunities in the regions.
John Feeney, managing director and global head of commercial real estate at Lloyds Banking Group, said that although Crossrail was having a positive impact on London, there was more scope for development in the regions that is not being met.
“A lot of government focus has been on grand projects,” said Feeney. “There is a role for smaller-scale infrastructure that can support housing development across the country. We need an approach that works on a local level to a greater extent. That has been a little lacking.”
The opportunity, he said, comes from a strong demand for high-quality office space in the regions that is met with a “dearth of supply”. Cities need to develop both the infrastructure they need to be accessible along with the office supply that matches demand.
Feeney said: “When we don’t get the development pipeline right, it has a real impact on the economy.”
Speaking about Legal & General’s developments in Leeds, Cardiff and Newcastle, Bill Hughes, head of real assets at Legal & General, also emphasised the potential in the regions, calling London “congested”.
He said: “We are trying to invest in places that are less congested with capital. London represents a tremendous investment opportunity, but that tends to be where international capital will go.
“If you are a UK investor, I would say, proportionally speaking, those regional cities are less congested, they are underdeveloped and there is potential for UK cities to do a lot more.”
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