MIPIM 2016: The appetite from investors for the UK’s core cities is as strong as ever. That was the message from Sir Michael Bear, chairman of UKTI Regeneration Investment Organisation.
Speaking as a panelist at the UK Core Cities: Where is the Wise Money Going debate, Bear said strong leadership and getting investors in front of the right projects was key.
In a discussion that covered the impact of devolution, UK plc vs the regions, Brexit and the Budget, the issue of rising interest in specific sectors versus specific regions was raised.
“Investors always look at areas of good infrastructure and good employment opportunities with strong local leaders. They want to go to areas where there is strong political support for good projects… There is a real appetite for UK risk,” said Bear.
“We are moving from a supply-led to a demand-led market structure. We know where there are intelligent projects. The secret is how to matchmake and get money to flow to particular projects,” he added.
Whether there was appetite for longer-term investment – which the larger-scale projects that cities are promoting require – was a matter for further debate.
Gerry Ferguson, head of UK property pooled funds at Aberdeen Asset Management, pointed out that his firm’s retail funds normally have a relatively short lifespan and therefore would not work for longer-term projects.
But there are funds that are prepared to invest what was termed “patient money for patient returns”.
Roger Marsh, chair of the Leeds City Region Enterprise Partnership, cited Legal & General’s recent £50m investment in a modular housing manufacturing unit in Leeds with a view to rolling out the concept across the country.
Speaking after the debate, Marsh emphasised the need for the UK’s regions to work collaboratively and recognise each other’s specialisms.
“It is about complementarity,” he said. “For example, from an automotive perspective, we in the Leeds city region do not make cars but we make two-thirds of the world’s diesel turbochargers. Birmingham and the West Midlands knowing that and showcasing that
as a car manufacturing region is complementary rather than unhealthy competition.”
Brexit: understanding the risks
A hands-up vote from the audience seemed to indicate that Brexit was having a minimal impact on market activity so far. The majority thought the UK would still be in the EU after the vote on 23 June.
Ian Stringer, regional senior director in Bilfinger GVA’s Birmingham office, said: “It doesn’t feel that different to the run up to a general election.
“There may be one or two occupiers that wait a little while. But I can’t put my hand on my heart and say there are any major deals waiting.”
However, Bear said it had been a key question during his past three overseas trips, with investors trying to understand what the risks were.
“They see it as a blip,” he said. “They have seen what can happen with these blips and are taking a long-term view of the UK.
“I think that we have never been in a stronger position to attract investment, notwithstanding these uncertainties.”
The panel:
- Sir Michael Bear, chairman, UKTI Regeneration Investment Organisation
- Ian Stringer, regional senior director, Bilfinger GVA
- John Clancy, leader, Birmingham City Council
- Roger Marsh, chairman, Leeds City Region Enterprise Partnership
- Mike O’Connor, head of infrastructure, projects and energy, Addleshaw Goddard
- Gerry Ferguson, head of UK property pooled funds, Aberdeen Asset Management
- Chaired by Damian Wild, editor, Estates Gazette
In partnership with:
- Addleshaw Goddard
- Bilfinger GVA
- UK Trade &Investment
- Leeds City Region Enterprise Partnership
• To send feedback, e-mail stacey.meadwell@estatesgazette.com or tweet @estatesgazette
