Is 2013 going to be lucky for Yorkshire’s property industry?
MF: I have a unique vantage point, with most of the city’s major developments coming through my door, and I feel that while there are different levels of recovery, it’s more buoyant than it has been. Taking on initiatives such as the Tour de France is just one example of our confidence.
GJ: It’s dangerous to think it’ll all be okay with Le Grande de Pas coming in 2014 and Trinity Leeds already here. There are still parts of the jigsaw to be placed if we are going to make it a good year ahead.
Is the need for speculative development going to return?
AL: I’m afraid we’re not going to see a lot of speculative development – not in the next two to three years – if any, because the funding appetite is not there. But we will see more prelet development and maybe some of that will have some speculative element piggy-backing on it.
Where will funding come from and when?
AL: Not from banks. Social housing is going to work only if the government or local authorities can put land or money into housing projects so that the builder can at least recover something, because it isn’t fundable. There is some hope that pension funds and the insurance market will develop an appetite to invest in property more than they have, as they are unencumbered by slotting and capital adequacy requirements.
MF: What I see are transactions coming through that have less involvement from the banks; more joint ventures between developers, where one has the proposition and the other has the equity.
What can Leeds city council do to bring forward Hammerson’s Eastgate development?
MF: It was clear with the £650m development in the context of the current market that Hammerson was going to bring it forward on a phased basis. But the difficulty was that the car parking was in phase two and John Lewis wanted to commit a significant amount of money to develop a store with a car park in phase one. So the council decided to buy Millgarth [police station] to make that happen.
What will be the implications of postponing the 2015 rating re-evaluation?
GJ: It’s hugely negative for the local property market and for the UK. We all know that we’re dealing with a valuation list that goes back to 2008 and therefore the values we have in the current rating list are taken from the good old days, which we’ll never see again. It will affect the occupiers’ view, it will have an effect on rents and therefore that will feed into capital values.
MF: A city like Leeds collects all the business rates and then passes all of that to the government. It’s then cycled back to us through a complex formula. This means local authorities like Westminster generate far more business rates than they actually get back through and those like Liverpool are net beneficiaries. That’s going to change. Local authorities will retain an element of the local business rate growth that they generate and that is crucially important.
AL: Places like the North and the North East will have a significant or a reasonable drop in their rates. Places like London probably won’t. So the effect will be a reduced gap between the North East and London. If we are to sell Leeds successfully, we need to be able to sell it on the basis that it is a great place to work and live and a cheap place to work and live. A rating revaluation would have helped us promote Leeds as such.
What infrastructure projects could increase Leeds’ competitiveness with Manchester in addition to HS2?
PF: We need the railway station to be refurbished. It has to be done within the next five years, and it could almost be self-financing by attracting retail and leisure occupiers. Also, we’ve got this trolleybus system coming in for 2016. Having nice new buses floating around the city improving the congestion problems is a positive thing.
RM: We still have a love affair with the car, so it’s good news John Lewis comes with a car park. It might be nice to have a few shiny buses around, but that might add more of a problem than a solution.
How can Yorkshire elevate its international presence?
MF: Our arena means that for the first time Leeds is listed alongside other major cities in the UK for event tours. Plus, we’re now a player in that market for such things as the Tour de France, Rugby League World Cup and Rugby Union World Cup. However, cities in eastern Europe are ranking increasingly high, so we can’t afford to stand still.
PF: There are some fantastic hubs forming in Yorkshire: we’ve got health and medical expertise in buckets, leading expertise in the low-carbon sector and our digital technology sector is very strong. These are all killer facts – we’ve got to sell them.
GJ: I wouldn’t underestimate the role of sport. I see where Leeds stands in the football league tables and it’s pitiful. I just thought that if the council has a couple of million to buy a car park, could we have a couple of million to buy a decent player?
