MIPIM delegates in Cannes yesterday were treated to an exuberant speech from investment minister Lord Dominic Johnson.
The former hedge fund manager, and business partner of Jacob Rees Mogg at Somerset Capital Management, was in Cannes to drum up investment into the UK. “I see myself as the concierge for investors coming into the UK. It is my job to make sure that the whole of government looks at their actions through the lens of the investors,” he said.
And he was not alone, Johnson said. There were “literally thousands” of civil servants from his department at MIPIM looking to lure investors into UK property. “It wasn’t difficult to recruit them to come on a nice trip to Cannes,” he added.
The minister was speaking at the EG Pavilion at MIPIM to extol the virtues of investing in UK property.
“I can’t overemphasise enough the importance of international capital in our property market,” he said, adding that out of £8tn of real estate in the UK, £2tn was investment-grade stock.
At times attendees might have been forgiven for thinking they were being given a speech by his namesake, Boris.
Johnson praised the tech start-ups that were adding value to the UK economy. “That’s why people are coming to the UK to make their investments,” he said.
“We have a 146 unicorns – we have literally herds of unicorns. Sweeping silvery herds of single-horned, pointed unicorns, sweeping across the plains of Silicon Fen and Silicon Glen and all the other science parks around Cambridge.”
But at times it seemed the former hedge fund manager had a slightly different view of the sector than his audience.
“Nothing matters more in property than your.… what?” he asked. “Location,” replied one. “People,” replied several others. Johnson mulled the words. “Anything else? I’m going to tax you, but I know you’ve had a nice lunch.” He paused. “The rate of return?” he prompted.
“It’s the rate of return, isn’t it? Isn’t that what you are focusing on when you do a property investment, the rate of return. And the only way you can calculate your rate of return is through… what? The cost of… the cost of… It’s quite a slow audience this… Your cost of capital! Yes?! Is the penny dropping?”
As much as he wanted to thank the investors and agents, Johnson also pointed to the role of government in supporting investment. “Did anyone thank the government recently? Because actually the government is doing an huge amount to ensure that real estate investing is a success.
“I am often asked ‘where are the incentives?’ And I literally say there are pots of money around the UK to regenerate our cities and towns. The issue is, sometimes there are so many different pots of capital that people become confused.
“We can prime the pump, with our levelling up agenda.”
He added: “The Budget is an exemplifier of the sort of policies that provide for you that stable and predictable environment, with a low cost of capital to allow you to invest in the UK and ultimately generate long-term returns.”
Johnson also said he wanted to change the relationship with Europe with his “Project Grande Amour”, or “Grosse Lieber” when he is in Germany. But, vitally, in the UK, “the buildings speak English! Yes, that is extremely helpful”.
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