The property industry is racking up plenty of air miles these days as the heads of many UK-based firms shuttle to and from Asia, seeking to cash in on the world’s fastest-growing economies.
The challenges are, of course, formidable. Take China, for example, perhaps the most favoured market among the property elite right now, both for the opportunities it offers domestically and for its potential investment outflows.
The challenges of cultural and language barriers need to be overcome. On the regulatory front, many businesses already active there see a growing risk of protectionism and preferential policies for domestic firms. And targets are often moving. Only this week, China’s tax regime for foreign companies was changed.
But the potential prizes on offer make it worth the effort. The growth rates of western economies at sub-2% pale next to those of the emerging economies. In some cases, the latter are nudging 10%.
The latest monthly fund statistics from the Investment Management Association bear out that confidence too. Investors are piling into the region.
According to the association, the global emerging markets sector was the best-selling one in October, with net retail sales of £336m – its highest month on record.
And Chinese companies are eyeing a European presence too. Seven Chinese banks have signed on for space in London over the past 18 months alone.
Then there is perhaps the biggest prize of all – success in China itself. As Peter Bill writes this week (page 47), UK agents such as Savills would love to crack the mainland market from a residential sales perspective. It may be more dream than ambition at this stage, but we all need dreams.
It would be facile to say that to be a success in China these days you need to have enjoyed success there already. But it certainly helps. And if joint ventures are “inevitable” in a UK context these days, it would be surprising if they were not the key to doing business in China in 2011.
Fears that the localism agenda will usher in the return of nimbyism are misplaced – it never went away. The results of a YouGov poll out this week show 81% of people believe Britain needs more housing.
But the survey, commissioned by the New Homes Marketing Board, also shows that far fewer people – just 50% – would welcome more homes of all types in their neighbourhoods.
That 31 percentage-point gap has widened since the NHMB last asked the question in 2007, when it stood at points.
By that crude measure, I make it a 50% increase in nimbyism in just three years. It’s a bleak finding – one that could get worse under the new planning regime, however laudable its motives.
Good luck to Max Sinclair. The UK head of Eurohypo is chairing a new industry group that hopes to improve transparency around bank lending to property.
The goal is that should the Bank of England, the government or whoever want a better – and, crucially, up to date – grasp of banks’ exposure to property, this group would be able to provide it.
Currently, the group’s moniker is a wordy credit to its founding organisations – the Investment Property Forum/Association of Property Bankers Joint Banking Group. That’s a mouthful that needs to change once it launches properly in the spring, with a research project based on conversations with the top 20 or so lenders in the market.
The ambition of the group – let’s call it the IPFAPBJBG for simplicity – is worthwhile. In terms of transparency, the industry was found wanting when the financial crisis broke.
Even now, with banks understandably reluctant to talk to competitors about lending levels, it will take time to get it right. But with the finance directors of major developers and a handful of leading bankers on board, it stands a good chance.
