At the beginning of a new year and decade, property’s leading lights reveal their hopes, expectations and resolutions for 2020 in the first of a two-part special running over the next two weeks.
Director, Caddick Group
Boris Johnson’s election victory was delivered by northern constituencies and now his government needs to fully support the north by ensuring it has world-class infrastructure and high-quality homes to support a growing workforce.
Regional cities are on the up. Attracting serious investment and major occupiers and transport and housing are essential to continuing that growth and it is crucial that the new government delivers what it has already promised, while also exploring what other projects may be needed.
Home ownership was at the heart of Conservative housing policy but there needs to be a recognition that renting is increasingly a lifestyle choice.
Build-to-rent can also help regional economies grow by allowing talent to move easily between opportunities and supporting regeneration efforts through accelerated delivery and higher absorption rates than for-sale housing.
Property and the economy as a whole will likely see a ‘Boris bounce’ while regional cities will continue to thrive thanks to rising graduate retention rates, improved employment opportunities and affordability, as well as thriving leisure and culture scenes.
In real estate, the trends we are already seeing – the move away from physical retail, traditional offices and owner-occupation – will accelerate. That’s why as a group our focus is on ‘beds and sheds’: delivering mid- and big-box facilities to service Britain’s ecommerce boom as well as progressing with our Moda Living BTR pipeline.
The changes in retail and commercial mean the nature of anchor tenants that typically underpin mixed-use projects will also change. Investors will increasingly look to public realm, cultural occupiers and even residential to tie together schemes and give them an identity and sense of destination.
Resolutions: We’re committed to delivering our £5bn development pipeline, focusing on BTR, the living sector and industrial and logistics. Having started on phase one of SOYO, our new £300m neighbourhood in Leeds city centre, we will also progress with city centre sites across the country and central London.
Angel Gardens is obviously another key priority. We saw really healthy demand for apartments ahead of the building opening and with the first residents in, we want to redefine what it means to rent, setting new market benchmarks while also delivering our other sites as well as acquiring new ones.
Serial chair, non-exec and adviser on real estate
On infrastructure, I really hope we will get an early decision on HS2 – and I suspect that while that will be positive it will involve an acceleration to the start of the northern arms (although goodness knows where HS2 will find the capacity to do that). Equally, I would hope for a decision on Crossrail 2 but I doubt very much that we will get it and I am afraid that arguments over funding will continue.
On planning, I confidently predict that all the words and fine thoughts emanating from government will make not one jot of difference to how the system works. So developers should adopt a self-help approach and invest their time in cultivating good relations with their local planners.
It is clear the issue of trust in developers and how they treat local communities is only going to get bigger. Solving this problem will require a paradigm shift in how developers regard viability and affordability.
Housing will continue to be huge – but without any breakthrough initiatives, that will make a really big difference to the numbers. I’ll continue to hope, though, that this will be the year that what I grew up calling ‘council housing’ finally comes back into fashion.
I would love to think that this will also be the year when government really gets to grips with the iniquities of the current business rating system. But I am not optimistic.
And finally, I confidently predict that the many millions going into saving our high streets will only be well spent in those places that are brave enough to adopt a revolutionary rethink of what a high street should be.
Resolutions: Not to take up any more non-executive or charity roles without giving up something else first!
Chairman, Prestbury Investments
More than three years of bitter political fighting caused significant damage in many areas, which will hopefully diminish, but the sense of relief in many quarters that the country has come together in such force to support this new government is palpable.
What mattered so much to me, and so many of my friends and colleagues, is that the country has now twice rejected a cruel and naïve Marxist doctrine. It is facile and dumb to knock ‘billionaires’ to try and convince sensible people that they have to vote for extreme politics to make a point.
The wealth creators of this great nation come in all shapes and sizes, from the corner shop owner to those of great entrepreneurial businesses, and it is their success that provides employment and the taxes that a socially aware government uses to distribute support to those who most need it.
Our industry is a massive generator of tax for this country both directly and indirectly and it is my great wish that we continue to do so but even more productively.
My hope for 2020 and beyond is that we can come together as a nation and recognise that democracy has spoken loudly. Racism must be destroyed, consensual politics reignited and wounds healed as we address an exciting future together with collective hope and positivity. I profoundly hope the Corbynistas evaporate and are replaced with a broad-based opposition, but sadly I fear this prayer may not be answered.
I am expecting 2020 to be a decent year for our industry but not a great one. Values religiously track GDP and 2020 will be much too early to see it begin to benefit from leaving the EU. First, we need a good trade deal.
Deal liquidity will be the new challenge for this year as new disposals stall.
Rents will not move up from current levels for some considerable time and yields will remain stable for the best and decompress a little for the rest.
I do expect more government intervention in real estate, which is rarely helpful. Open-ended funds and PRS are my predictions for early intervention
My colleagues and I have spent way too much time in the last few years second-guessing every next political turn and acting accordingly. The intellectual energy that has gone into that has diverted us from the many positive things we could have been doing.
At a personal level, I feel more in tune, as a result of this recent election, with what matters to people who feel so disaffected and ignored by the focus on London and the South East.
I have observed the problems away from the capital in other more deprived parts of the country with a sad sense of inevitability. These regional issues must be tackled with serious resources to improve education and commercial and industrial development through extensive incentives.
QE has resulted in the wealthy becoming wealthier and increasing the gap between the haves and have-nots. I personally feel a great sense of responsibility to make sure this government’s feet are held to the fire so we can improve people’s circumstances and reduce inequality.
The success of our nation depends upon the wealth of the nation as a whole and as an industry we have a big role to play in making this happen.
As incredible as it may seem to be writing this, but I feel I must, there are many people actively engaged in real estate, not least of all British Jews, who are sleeping much easier today than a few weeks ago and who can now refocus away from potentially leaving this country to putting their efforts back into our industry. May no peaceful religion or culture ever again feel threatened by any political party in this great country.
Resolutions: To be part of a genuinely kinder, more benevolent society. I want to increase my efforts to make that happen.
Managing director, Patron Capital
A true ‘hard Brexit’ would be disastrous, but I don’t believe a Dr Strangelove scenario will come to pass.
Details on trade agreements are likely to take a long time to nail down, but I hope the core principles of Brexit will be agreed quickly and that sensible interim agreements will be put in place. I also hope to see a release of the pent-up energy and repressed activity of the past few years.
I fully expect the state of the economies of the US and China to play a leading role in the future of Europe. Currency exchange rates, trade tariff discussions between the US and China and US and European trade agreements are all having an impact.
Europe will need to be very careful in the coming months when it comes to discussions with Trump, especially in light of his own forthcoming election battle. This political uncertainty will continue to make determining when to exit stabilised assets challenging.
We will also continue to see the universe of buyers that we work with evolving: we now have a landscape where there are large pockets of wealth pursuing very specific investment profiles and these will continue to become more pronounced.
Resolutions: Corporately, our focus will be on ensuring the continued successful distribution of Fund IV and Fund V, further developing our investor relationships, investigating how we can use technology to support and maximise our existing investments, and driving the development of the new WISH fund, which will provide homes for vulnerable women.
Beyond work, I will remain dedicated to giving back through the Patron Charitable Initiatives programme. A core focus of this will be having a positive impact on half a million children in the UK by growing the footprint of the Prince’s Teaching Institute and building a better transition plan to support the rehabilitation of the UK’s war veterans. Finally, and most importantly, I want to be present for and supportive of my children and wife and our parents.
2020 vision: predictions for the year ahead
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2020 vision: predictions for the year ahead (part one)