Property craves political credibility. For an industry that contributes at least £100bn to the economy each year, its influence is weak. In south-east Asia this week, that may have changed.
On an unprecedented tour of the region, the prime minister championed the UK property industry like never before.
It was a tour of two halves: trade and investment. On trade, David Cameron wants to raise UK exports to £1tn a year and get 100,000 more UK companies exporting by 2020. Asian economies will be significant drivers of global economic growth over that period and, with the UK currently trading more with Belgium than with Indonesia, Malaysia, Vietnam and Singapore combined, the opportunity is immense.
But investment was just as important in the pitch. Here no such targets have been set for the trip, but in Singapore and in Malaysia the PM repeatedly urged some of the world’s wealthiest investors to place their capital in the UK and in one region in particular.
This was a northern powerhouse trade mission and no one was going to be allowed to forget that. “Look at Britain in a new way, look again at the north of England,” Cameron repeatedly told investors. “Look at housing opportunities, look at retail opportunities, look at investment opportunities. We want to rebalance our economy and we want Singapore investors to help us do that.”
The full weight of government? No one I spoke to in Singapore and Malaysia could remember the last time so many senior ministers had been called up for a tour of this scale. Business secretary Sajid Javid and energy secretary Amber Rudd were travelling with the PM, alongside SME minister Anna Soubrey and trade minister Lord Francis Maude.
Heavyweight backing came from this industry too, marshalled by UKTI’s Regeneration Investment Organisation. BNP Paribas Real Estate UK chief executive John Slade and Legal & General Investment Management head of real assets Bill Hughes were there; KPMG real estate chairman Stephen Barter and regional developers Urban Splash and Scarborough Group were also among 60 businesses on the trip.
Nevertheless, there are formidable challenges to turning talk into delivery: financial, political, geographical and parochial.
Leeds city council leader Judith Blake had to defend her trip to regional media back home but, with Greater Manchester interim mayor Tony Lloyd also travelling to advance that city’s cause, it was easily dealt with.
On the financial front, in China share prices lost a third of their value in June and have slid further since. Many in this part of the world are sanguine, seeing it as a rollercoaster market that will continue to rise sharply and fall dramatically. Others see it as a potential turning point and a test of government. Whoever is right, it is an unwelcome distraction.
And while Singapore’s two sovereign wealth funds, GIC and Temasek, have already invested a significant slug of their $500bn (£320bn) assets under management in the UK, Malaysia is less well tapped. That leg of the tour was dubbed Beyond Battersea, reflecting a desire to persuade the country to build on its best-known UK investment.
Then there is politics. As the planes carrying the UK contingent touched down in Kuala Lumpur, the Malaysian prime minster was sacking his deputy and four other ministers amid a financial scandal involving debt-laden state investment fund 1MDB. It may pause investment activity too.
At home, overseas investment in UK property, certainly residential, continues to fuel controversy. Cameron’s pledge to improve transparency around foreign companies owning UK property is right on paper but will need to be implemented with care.
The most welcome political intervention of all was that this trip saw government emphatically endorse the work of this industry, hopefully marking a turning point in that relationship.
Above all though, this was billed as the first northern powerhouse trade mission. And in putting the region on the map it was a success.
Trade deals valued at £750m were signed this week. Investment deals take longer, but a much-talked-about pipeline needs to be converted for all boxes to be ticked.
