Property 2015: UK property industry meets to explore new approaches for the Scottish regions
When the great and good from the UK property industry converge, we might expect a lively interrogation of well-trodden territory – funding, planning, yield, for instance, with little in the way of surprises. However, those harbouring a faint hope of hearing, learning and discussing new ways of thinking and approaching less well charted terrain were not disappointed when they gathered in Edinburgh earlier this week at Property 2015.
Of the impressive speaking panel, first up was Lloyds Banking Group‘s chief economist, Trevor Williams. Much to the appreciation of his audience, Trevor distilled a big subject: the global economy, into a lucid explanation of what is going on ‘out there’ and how it is affecting us here in the UK. He pointed to the recovery being entrenched almost everywhere in the UK; coupled with positive consumer confidence. But, he said, the British population are avid consumers, they love to consume, and this means that we continue to live beyond our means. The message here was: trim our sails or sell off assets to external investors to fund our lifestyle. This last point, foreshadowing the sentiment expressed by others in the room for the need to attract foreign, indeed any, investment.
The results of a snap survey conducted during the conference, confirmed major concerns with Scotland’s ability to realise development and investment into the sector. Top of the list was political instability and uncertainty, homing in on worries over the Scottish Executive’s proposals for rent controls. This was followed closely by the lack of flexibility and gridlock in the Scottish planning system.
Duncan Sutherland, Regeneration Director, Sigma Capital Group, stressed that there was a real opportunity for developers, investors and local authorities to work collaboratively on innovative solutions to develop rental accommodation which offer good returns in the longer term to stakeholders.
However, like many of the speakers, his view was that we shouldn’t be making it too difficult for investors to come on board. Speed of development is a key ingredient in being able to make build-to-rent developments work, referring to the Kuwaiti-backed £1bn funding his company secured for a new private rented sector housing portfolio of 10,000 houses throughout England, which, he believed wouldn’t have happened in the face of a drawn out planning process or political uncertainty.
David Yaldron, Grosvenor Britain & Ireland was not at odds with Duncan’s view, advocating a more pragmatic rather than default view on the part of planning authorities as the way forward. He cited how that approach has worked well in the London boroughs. Getting developments up quickly, he said, means that boroughs themselves can swiftly reap the rewards of new housing, which include jobs, regeneration and council tax receipts.
James Fennell, Nathaniel Lichfield & Partners, stressed that we need more of the right houses in the right places at the right prices. That is, in places where people wish to live rather by allowing NIMBYism (not in my backyard) to influence planning decisions.
James presented a strong case for more housing in the right places: the economic footprint of providing 100,000 new homes in the UK would, according to NLP report ‘The Economic Footprint of UK House Building’, generate £3.2bn on resident spending on goods and services; 430,000 new jobs; £13.6bn on economic output; and the list goes on in his compelling argument for ‘more.’
The theme of building where people wish to live was echoed by Ian Mulcahey, Managing Director, Gensler Architects, best known in recent years for designing the Shanghai Tower, a mixed use building, three times the height of London’s Shard. According to Ian, we are living in times of huge change to the way we live and work. Demographic shifts and technology are creating enormous pressure for planners and local authorities and designers. The challenge is therefore to ensure that we create buildings which are “endlessly flexible and adaptable”
“Money will follow opportunity,” concluded Colin Innes, partner, Shepherd and Wedderburn. “Large private debt funds, foreign investors, as well banks are willing to invest in quality assets in the sector. It’s up to us in Scotland to cultivate the right conditions for them to park their cash here.”