Gerald Ronson’s speech at the annual Heron lunch isn’t quite up there with Warren Buffet’s market-moving address to the Berkshire Hathaway AGM each year, but it remains one of the most important annual bellwethers in UK property.
Last year Ronson warned: “We are creating a two-tier country where I fear the effect of significant unemployment will be social unrest.”
The events in the capital last weekend proved him right. Yes, it was isolated – a small group engaged in unlawful disruption marring an otherwise peaceful and legitimate protest. But with the full impact of cuts yet to be seen, it felt like the beginning, rather than the end, of a lengthy spell of discontent.
By the time Ronson once again addressed a group of property’s best at The Dorchester on London’s Park Lane on Wednesday, the clean-up operation was largely complete. That did not deter him from returning to his theme: “There will be major implications following government spending cuts and initiatives to re-base our economy.”
That said, he was a little more upbeat than last year. A “big cloud” continues to hang over the provinces, with 2014/15 the “most likely time for the sun to start shining again”.
The mood was altogether brighter at the week’s other big event, the Estates Gazette/UK Regeneration conference.
Regeneration looked dead and buried 12 short months ago. (And, my, doesn’t it feel like a different world today: do you remember we once had a Labour government?)
But the gathering of more than 100 local and central government officials and politicians, developers and bankers proved that there is fertile ground here.
From Ronson down, no one doubts the need to continue to regenerate, to improve the built environment, to place make and lift communities out of poverty. But identifying ways and means in these cash-strapped times remains a hell of a challenge.
London projects that had acquired momentum before the crash continue, from the East (Stratford) to the West (Earl’s Court) to the North (King’s Cross). But how to get other projects under way?
Last week proved only partnership will make others possible. Dialogue, burying mutual suspicion and recognition of complementary strengths are vital.
As a developer working on one of the above schemes said to me this week: “If I go into a meeting with a council braced for a row, I know the entire project isn’t going well. If I’m looking forward to a meeting where we work out a way forward together, I know the whole thing is on track.”
EGi revealed this week that Soho Estates, the £366m property empire of the late Paul Raymond, would be split into two following a strategic review. Two thoughts occur:
First, that book valuation – for a large and significant slice of central London real estate – is modest to say the least. Its market value even in its current condition will be a multiple of that.
And second, what does that mean for a hugely under-exploited basket of assets? Watch this space.
The Budget is one of the many topics that will be discussed at the next Estates Gazette web seminar.
Following the success of our Mipim event, which saw an audience in the UK ask questions of a panel in Cannes, next week’s follow-up will put another expert panel at your disposal.
As well as the Budget, finance-related topics are bound to dominate given that Credit Suisse’s Ian Marcus, chair of the Bank of England Property Forum, and Legal & General’s Bill Hughes are taking part. Gary Taylor of Argent and GVA’s Rob Bould complete the line-up.
Watch and quiz at estatesgazette.com on 5 April at 1pm.
