Dominic Curran
Head of Communications
Certainty, stability and predictability are what investors look for when making capital investment into new or regenerated places.
Key to achieving this certainty, stability and predictability is a realistic council leader or Mayor who shares the objectives of the investor and who can ensure that the other parts of the local council or relevant authority will work towards them.
Making investment viable
Underpinning it all is viability; there has to be a return on investment. That might require gap funding from the public sector, even if only in the form of underwriting rather than outright loans or grants. It might need to be the assurance that the local community – expressed through governance structures – will stick with the project through electoral cycles, which tend to be shorter than investment cycles.
Last year, overseas investors invested £57 billion into UK real estate
The challenge is even more acute when thinking about ‘the places that need it the most,’ where viability is most challenged. The return might take longer or be more uncertain (and therefore more expensive) and might require more partners.
Matching capital to opportunity
Last year, overseas investors invested £57 billion into UK real estate. Real Estate:UK believes that much more could come in from overseas, as well as domestically from pension funds and other institutional capital through the Mansion House accords.
However, this is put at risk if investors perceive uncertainty. Policy surprises like the ban on upward only rent reviews last year or speculation over rent controls in April spook markets, costing jobs and investment. Hopefully, our new Prime Minister recognises this from his time as Mayor of Manchester, where he encouraged regeneration of entire neighbourhoods through a pragmatic and welcoming approach to real estate investment.
Ultimately, and what Real Estate:UK aims to do, capital needs to be matched with opportunity. We represent the funds and other long-term investors in buildings and places who can bring the former — and speak to national and regional Governments who know the latter — and through this, seek to deliver the new homes, better places and more sustainable built environment we all need.
