Can real estate be the UK’s dot-joiner?

EDITOR’S COMMENT I am going to make a bet that there isn’t a single reader of EG who didn’t spend hours of their childhood with a book of connect the dot puzzles on their lap, drawing lines from numbered dot to numbered dot to create a pretty picture. Joining the dots to create a vision of something we can all understand isn’t complex. As kids, we may have sometimes not drawn the line perfectly and we may have got numbers in the wrong order, but we usually got there in the end. And we were probably five or six years old – not in our 40s, 50s or 60s. Why then, is it seemingly so hard for anyone in government to connect the dots? I may be doing the creators of those puzzles a disservice. There is probably a lot of clever thinking that goes into it. But again, if they can do it… I hear this in every conversation I have with people in the industry, whether in the private or public sector, in investment or advisory, whether they are the money or are the consultants. Let’s take this week’s publication of a long-awaited industrial strategy. This is meant to be a blueprint to drive investment in the UK. It’s actually not a bad read. The 66-page green paper does start to paint a picture of the UK this government wants to create. It wants to bring dynamism back to our markets. It wants to develop the great skills and innovative spirit that exists in this country. The idea of creating clusters of expertise in industries like advanced manufacturing, life sciences, digital and technology, and so on, in regions up and down the UK is sound. But it does feel like the paper has been pulled together by a group of people working in their own little silo. A rallying call for investment through a pitchbook of opportunity this week, only to be followed with the likely confirmation of some sizeable tax increases in the next couple of weeks. Tax increases that are already scaring off businesses and will make it harder and harder for our SMEs – the backbone of entrepreneurship and innovation – to operate and scale. Has no one joined the dots? In the industrial strategy itself there isn’t a single mention of real estate. No, wait. There is a single mention. It is in the notes and says: “This excludes the real estate sector.” Real estate is excluded from productivity figures because it is too hard to compare “due to the nature of how output is generated”. This industry’s omission is one of the biggest failures of the government’s dot-joining. If our nation’s strategy is to get behind advance manufacturing, clean energy, the creative industries, defence, digital and technology, financial services, life sciences, and professional and business services, then real estate needs to be a part of that. We need best-in-class facilities to build best-in-class industries and best-in-class places that homegrown and global investors want to plough time, resource and capital into. We are 100-plus days into a new government and there have been a flurry of plans pushed out, consultations launched, and big numbers attached to big ambitions voiced. I am definitely not against any of those things (I’m not even that opposed to tax hikes, done in the right way, with the right purpose). And I do love a mission-focused approach. But none of that matters if we don’t look at the whole. If we don’t see how one dot should connect to another and then another and again, then how can we make the whole picture make sense?  We need that first dot to ultimately join up with the last. And I’m pretty sure that if someone, somewhere in the great corridors of Whitehall could actually be bothered to calculate what the actual output of the real estate sector is, then they would see pretty quickly that it could be the thread that links those dots.