At the end of this month, the Association of Real Estate Funds (AREF), the British Property Federation (BPF) and the Investment Property Forum (IPF) will become Real Estate:UK – the culmination of months of work to create a new collective voice for UK real estate.
Melanie Leech
It is a significant milestone. Real Estate:UK will champion and represent the breadth of the real estate sector, comprising institutional and private investors, property companies, developers, asset owners and managers and the huge array of service providers that support them.
It is a critical time for the sector to come together and articulate clearly real estate’s role in a robust economy and in underpinning healthy communities. Debt costs remain high, the UK’s economic growth forecasts have been cut and over the next two years inflation is expected to be higher than previously projected, in response to the Iran war and surging oil and gas prices.
New home development is at its lowest level since the global financial crisis, and while office demand still far outstrips the supply of new, premium workspace, across most of the country, development of all types remains unviable. These issues are not unique to the UK, and the challenge for our government, against a difficult background, is to take policy decisions that create an environment that attracts and stimulates domestic and global investment and harnesses it to our shared agenda.
Real Estate:UK will support the government in making sure that its policies deliver the new homes, communities, economic growth and carbon reduction targets we all want.
Building strength: three industry bodies are coming together to better promote the development agenda
Credit: Shutterstock/ Gareth Abraham
It will champion the reasons to invest in the UK: our stable economy and transparent legal system; our education system and the talent it produces; London’s pre-eminent role as a global destination; and the opportunities created across the UK to partner with forward-looking regional and local leaders to deliver the homes for people at all stages of life, as well as the office, retail and leisure spaces, and the logistics facilities, that support modern life. We also have a compelling story to tell in emerging asset classes such as tech and life sciences.
Protecting investment pull factors
We need to protect those pull factors to maintain the UK’s attractiveness to global investment. A crucial element of this is to ensure that politicians understand that tax and regulatory changes have far-reaching consequences for the country’s ability to be competitive and attractive. We’ve seen the evidence of what happens when decision-makers bow to political pressures and opt for superficially seductive policies. Take rent controls: investment in housing in Ireland and Scotland fell off a cliff when they were introduced.
Even minor tweaks to established policy can affect investor sentiment, particularly when introduced without notice or consultation, such as the ban on upward-only rent reviews. This in turn undermines the supply of new homes and hits the pipeline of new commercial development.
Real Estate:UK’s job is to work with national, regional and local governments to make sure policy is well informed and to deliver the shared, positive outcomes communities and the sector want. We have some positive initiatives to build on – the government’s far-reaching planning reforms should increasingly feed through to local development. And reform of the pensions landscape will unlock very substantial sums to support development of infrastructure and real estate.
The past decade has also seen huge diversification in commercial real estate, whether in new emerging asset classes or the multiplicity of investors. That’s why the time is so propitious to celebrate the achievements of AREF, the BPF and the IPF and welcome the birth of Real Estate:UK.
Melanie Leech is chief executive of the British Property Federation
