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Chris Plumley, real estate partner at Trowers & Hamlins reflects on the recent UKREiiF real estate conference and what it means for the public sector.
The UKREiiF conference has just finished and what a fascinating and exciting experience it has been. The great and the good of the UK property industry has congregated in Leeds for the last three years bringing together all aspects of the real estate sector. This year there were almost 13,000 delegates including a raft of new investors partners. The conference is an opportunity for local authorities to talk about their investment prospectus, to launch new development opportunities and also highlight the successes and lessons learnt from existing schemes. It was an excellent four days with a tremendous spirit of collaboration and connectedness with also a couple of key takeaways.
I co-presented at one of the Trowers & Hamlins and Avison Young joint masterclasses. Embodying the spirit of collaboration our session looked at successful estate regeneration projects. For more details see https://www.linkedin.com/posts/trowers_register-your-interest-avison-young-masterclass-activity-7190651079355768834-I0MX.
My key takeaways from the conference:
people have been talking at these events about collaboration and partnering for years so in some respects that is nothing new. There has always been a strategy based around collaborative working, partnering with key developers and funders, etc. One thing I noticed more this year, which was really encouraging, is that as well as discussing strategy, people talked more and more about actual implementation. There has too often been a disconnect between the grand plan and its implementation but this year it was much more focused on getting the right people in place, the right legal and commercial structures, focusing on resourcing projects properly, using innovative procurement techniques and really putting in place the tools to get projects away. These projects only happen if you get the right team on board and, therefore, implementation is as crucial as the overarching vision;
confidence was high – the fact that the general election was called mid-conference didn't actually have that much of an impact. There has been a suggestion anecdotally that there is a "wall of money" waiting to be spent once the market has some certainty around who is in central government. That wall seems to have broken and the money was being offered. So many schemes are being launched on the anticipation and expectation that confidence is returning to the market and that was incredibly encouraging to see;
councils in competition – there is only so much development capacity in the market and councils are really putting themselves forward as opportunities for investment and development but it really struck me that the councils who are better prepared, have the attractive schemes, are ready, resourced, are properly and commercially engaging with the market will have more success. Where councils are still displaying market/developer scepticism, not wanting to engage, are anti-partnering then the market will just go elsewhere. Members and officers who know how to confidently create a positive partnering environment will attract better inward investment. I had numerous conversations with public and private sector colleagues who echoed that sentiment. Happily, the level of engagement and preparedness is getting better and better each time. The quality of the development and investor prospectus on display was really high and so that competition is hotting up;
purpose – people are now asking "what is the land for" as well as "what is it worth". The successful schemes seem to be the ones that are focused on the needs of the community and the needs of the location rather than just an imposed development solution which is pursuing higher land values in isolation from need. Those isolated unconnected developments which are not focusing on the meeting of a need seem to be diminishing;
leisure led – high street and town centre regeneration has often focused on retail. It has been a message and a warning for many years that the retail market is not necessarily the draw that it once was. It is not new to say that retail had to become more experiential linked to longer dwell times and a related food and beverage offer. A number of promoted town centres this time focused on leisure and learning with linked employment sites. The provision of good quality office space seems quite high on a number of councils' agendas – hybrid working patterns are stabilising with office use returning. Good quality leisure, either sport or entertainment, did seem to be a prominent feature of some of the collaborations I talked about;
energy – there was a lot of focus on green energy supply as a source of income generation for councils. Another area for a Trowers specialism, our energy team partners were in high demand;
revenue funding – whilst a lot of councils said they had access to financial capital for projects, it was still a struggle to get revenue to pay and resource project teams. I had some very refreshing conversations with directors of place who said whilst they appreciated there will be colleagues who try to protect the budgets of the council, actually, schemes are so important it was crucial to seek quality advice and assemble the right delivery teams.
So what about the election? The election was called half way through the conference and interestingly, it added to the sense of confidence that was already in existence rather than be a big shock or surprise. It would be interesting to see if this has much of an effect over the coming weeks but it does seem that, irrespective of the outcome, a degree of certainty that would be created is helpful for the market.
Local government as a place-shaper. Obviously for this blog and for my own practice area, I was very interested to see how many new schemes are being brought to market. Local government remains a vital cog in the machine of creating, shaping and influencing the built environment. Local government needs to retain its confidence and responsibility to deliver brilliant, vibrant, energised and community focused places to live, work and play.
Chris Plumley, real estate partner, Trowers & Hamlins
CPlumley@trowers.com
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