The devolution of power from London to a Leeds city region covering 10 local authority areas in Yorkshire generated much of the debate at Estates Gazette’s Question Time last week. The region now has some control over skills, transport, housing and small business support.
But full fiscal devolution has yet to come and with panelist Jonathan Turton, infrastructure director at KPMG, raising the claim that Britain had the most centralised economy in Europe, barring Albania, the audience asked who would be responsible for allocating resources in the event of full fiscal devolution, whether these people should be elected, and what the region would have to do to get an elected mayor.
Brendan Mannion of Leeds city council asked whether the vision of Leeds as a northern powerhouse was “keeping-up-with-the-Manchester-Joneses nonsense or a realistic opportunity”.
The importance of the Manchester rivalry was dismissed by several panellists. Matthew Jones, development director at Savills, said Leeds could stand on its own feet and its relationship to Manchester was “not an issue”. He also agreed with a questioner who had suggested that a devolved Leeds might become isolated from London and the South East. “We need to keep in touch,” said Jones.
Turton said the details around devolution were vague. There was a need to be more specific, particularly about objectives and problems. The cities of the North, he added, were more than the sum of their parts and the regions must work together.
Simon Sherwood, partner at Mills & Reeve, said the regions should be taking a strategic direction rather than keeping up with the Joneses. They needed strong leadership but there was no need for a Boris Johnson-type mayor.
Bill Hughes, head of real assets at Legal & General and president of the British Property Federation, said a strong leadership was necessary to drive things forward but it would have to work consensually. The Leeds city region is a highly diverse area, he said, and a “one size fits all” approach would not work.
Several panellists said the Leeds city region needed to sell itself better.
“There’s lots of things about Leeds that are really positive, such as quality of life,” added Hughes. “We own 16 assets in Leeds right now and have over £200m invested, so we’ve obviously seen something good about this location. But I wouldn’t put you in the top quartile for telling your story.”
Johnny Caddick, director at Caddick Developments, agreed, adding that there was growing interest from international investors. “We have a fantastic story to tell,” he said.
Building homes
Atam Verdi of Aspinall Verdi asked about the prospects for private rented sector investment, to which Caddick quickly replied that, in terms of demand and waiting lists, they were “fantastic”.
Rents were going up steadily, the sector had rallied, with pension funds favouring low-risk student accommodation. Caddick said there was huge scope in the sector, but a need for top-quality stock.
Hughes thought the build-to-rent sector could be expanded, with rentals producing a steady stream of income from properties that would never be sold. Leeds was well placed in terms of costs and demography and, because of its size, faced a reduced risk of being swamped.
Savills’ Jones urged developers to take a coherent line on growth in the city, supporting the expansion of the finance and business sectors.
Retail
Leeds’s role as a shopping and leisure centre came into focus, with questions about how the city might develop following next year’s completion of the upmarket Victoria Gate shopping centre, centred on a John Lewis store and adjoining arcades.
Caddick pointed to the example of Trinity Leeds, which opened in 2013 with 120 stores and an annual spend of £1.9bn. He said it was already acting as a catalyst for change in the city centre, helping to create a vibrant 24-hour economy.
Jones said the area between the two new shopping centres needed a co-ordinated improvement programme, although the area around the Leeds Arena had already been transformed.
He said Victoria Gate would be Leeds’s last major scheme for the foreseeable future and would help to revive the city centre and draw people from all parts of Yorkshire.
Speculative development
Responding to a question from Jake Pygall of Ryden about whether speculative development was back, KPMG’s Turton said confidence was growing but there were still questions about Europe and it was a case of “once bitten, twice shy”.
Jones was more optimistic and thought that the confident mood would power demand for grade-A space and keep the momentum going.
A handful of days out from one of the most unpredictable general elections in a lifetime, conversations understandably turned to its outcome. The consensus from the panel was that the effect of the 7 May vote would be negligible on Leeds, but that uncertainty was a risk.
Turton said while there had been an impact on the sector in the run-up to the 2010 election, there had been no pre-election rundown in investment this time around.
But there was chat about some of the more controversial potential policies being suggested. Caddick warned that a reintroduction of rent controls would “kybosh” development. However, the developer was confident the proposal would not make it through the election.
