THE FUTURE OF REAL ESTATE: The UK’s future success depends on UK industries and cities continuing to attract international investment as the country leaves the European Union, EG’s Future of Real Estate Summit heard yesterday.
In her keynote speech, Susan Caldwell, managing director of strategic relationships and performance at the Department for International Trade and Investment (main image), set the scene for the conference, explaining the need facing the UK is both economic and social.
She said: “Providing sufficient homes, regenerating local areas and redeveloping industrial sites will breathe new commercial life throughout the country. It attracts business and jobs follow. That’s why it’s crucial that we continue to attract global investment into the UK.”
In the following panel, Andrew Carter, chief executive of Centre for Cities, highlighted the crucial role investing in urban areas has.
He said: “8% of urban land produces 60% of the country’s output.
“When we talk about things that matter for more national prosperity, we really ought to get into the space around the role of urban as the platform and mechanism by which innovation, growth and prosperity grow.”
See also: Building in the human factor for successful communities
For cities to attract international investment, the panel agreed that urban areas need to understand what their strengths and weaknesses are and focus on those.
Deborah McLaughlin, managing director of real estate projects, real estate and infrastructure at Capita, said: “It’s picking two or three things that will make a difference to your city and focusing on that. To focus on everywhere gets you nowhere.”
But often, overseas investors will not understand the difference between certain cities, and it is important to work collaboratively to attract investment.
Tom Warburton, director of place at Newcastle City Council, said that when Chinese investors came to look at the UK, the northern cities worked together to show what the region had to offer as a unified Northern Powerhouse.
“Because of the relatively small size of UK cities, when investors come from China, they don’t see Newcastle. They think the difference between Liverpool and Newcastle is nothing.”
Once those investors are at the table, it makes sense to present the differing opportunities in each city but competition before that can be harmful, argued Bruntwood chief executive Chris Oglesby.
He said: “I see so much value destroyed at times when cities compete against each other instead of thinking of how to grow the pie for the region.”
What can private capital do to drive residential development?
Nick Walkley, chief executive of Homes England, broke down four ways the private sector can and should be helping the future of housing:
■ The crushing need and opportunity to generate diversity in the marketplace
“The tried-and-tested methods of building to sell will not get us to the 300,000 homes we need to simply stabilise house price inflation,” Walkley said. Private capital needs to start thinking about and investing in new kinds of tenure. He added: “Would you retire into the current retirement products that are on offer in the UK housing market? I need somewhere to put 2,500 records, for example. What does that product look like?”
■ Private capital must help the modernisation of the sector
There is “no prospect” of reaching the 300,000-home target with current construction methods. The challenge for the industry is to invest in new materials and methods to bring it to “genuine factory and engineering standard”.
■ Capital needs to think about places afresh
As growth in the South East continues, private capital needs to think about density and creating new places to live. Walkley said: “In the 1950s, people used to celebrate moving to new towns on the fringes of our major urban centres. What will it look like to create those sorts of opportunities and aspirations for the 21st century?”
■ Private capital has a role in supporting growth
“Now is the time to move beyond the metrics of the post 2008-09 crash, which limits the availability of capital and takes a risk-averse approach to investment,” Walkley said. He said Homes England will offer leverage and government confidence through guarantees and joint venture projects to support investment and growth. It recently formed a joint venture with Kier to deliver up to 5,400 new homes across England, and Walkley said it will continue to look for private capital to partner with on other projects like that.
What does the future look like?
With an HS2 station arriving in Crewe within a decade, Katrina Michel, chief executive of Marketing Cheshire, told the audience how the area will transform from a sleepy railway town into a major, smart transport hub.
“The guys working on Crewe have started from the basis that we’ve got a pretty virgin territory here,” she said. Here are several initiatives the city is looking into to solve everyday problems:
■ Smart parking – “You drive in from your house in the country and you will be told where to park your car for the shortest possible time to get on the train. Otherwise, the benefits of getting on HS2 have been eroded.”
■ Transport on demand – buses will run only when there is demand, which will help alleviate congestion
■ Waste management – using tech to work out when people do and do not need their bins emptied to optimise bin usage and save money for the council
■ Alternative energy – Using the geothermal energy underneath Cheshire East’s streets to support an electric car grid
■ Linking street lighting and WiFi – At night you could have street lighting on demand alongside WiFi coverage to call a taxi, bringing convenience to residents and savings for the council
To send feedback, e-mail karl.tomusk@egi.co.uk or tweet @ktomusk or @estatesgazette
