“Whatever the result of this week’s election,” I wrote before the polls closed last Thursday, “the political environment is decisively changed.
The electorate’s expectations are different. Policy priorities have shifted. And those changes will have important consequences for this sector.”
And how.
Fast-forward to Tuesday night at the London Real Estate Forum’s opening reception. The newish leader of Westminster council is addressing hundreds of the UK’s biggest investors, developers and advisers.
“There is no more time for cosy chats,” says Nickie Aiken, silencing the room. “Too many times we have not pushed back hard enough on the delivery of affordable housing. Things need to change and to do so now.”
If that sort of message had come from a Labour politician anywhere from Manchester to Barking & Dagenham, no one would have batted an eyelid.
That it came from a Conservative politician in the most Conservative of boroughs took the room by surprise. It shocked many, outraged others and drew support from some. Aiken certainly got people talking.
This happened to be a London event but it’s a conversation, and a conversion, that will be happening up and down the country.
The general election highlighted a shift in thinking; in truth it was more a continuation of a year-long trend that has shown the public mood to be populist, anti-establishment and willing to do what might once have been thought of as unthinkable.
Aiken’s announcement of a change of approach at Westminster was one that had been flagged since she took over at the turn of the year.
But it was the tone that had hardened, influenced in no small part by the fact that she faces an election next year. A repeat of last week’s vote in 2018 would see the Conservatives lose control of the borough for the first time since it was formed in 1964.
Other leaders will be making similar calculations and recalibrating their policies and tone where necessary. And if politicians are listening to the public mood, so too must the real estate industry.
Yes, it happens, but it should happen more. That’s why we spoke to community groups that attended LREF this year and to some of those who protest against this industry.
You may not like what they have to say – and they may not always be “right”, subjective though that word is in this context – but it would be a major mistake to ignore them. Their voices will only get louder.
■ The most covetable job in real estate? It’s hard to think of another more attractive one right now.
Hong Kong-listed C C Land, the group behind the £1.15bn acquisition of the Cheesegrater, EC3, is on the hunt for a head of investment to lead a new London office. The job description? Buy more trophy assets.
Well connected, well respected and deep local knowledge are the attributes candidates will have to demonstrate. He or she will lead a core team of five or six people.
It’s a great opportunity and also a ringing endorsement for the UK as it recalibrates following the unexpected outcome of the general election.
For now, “carry on regardless” seems to be the mood, at least for foreign investors circling the top end of the market.
Safra Group, the owner of the Gherkin, EC3, is considering a sale that could value the iconic building at £1bn, a price that would reflect a yield of below 3%.
It would also represent a near 50% profit in three years for Brazilian billionaire Joseph Safra, who paid £700m for the trophy in 2014.
Might adviser GM Real Estate receive a call from C C Land? I’d be suprised it is hasn’t already.
