Guest Viewpoint: Melanie Leech, British Property Federation
The UK property industry will travel to Cannes, as it does every year. But with Brexit imminent, says Melanie Leech, MIPIM in 2017 will be more important than ever
The commercial real estate industry descends on Cannes like clockwork every March, but this year’s MIPIM trade fair seems particularly well timed. The latter half of 2016 left many in shock, hit by volatility and uncertain about what impact Brexit might have on our industry’s future. While many of those pressures remain, and uncertainty will hang over us for some time to come, MIPIM provides an ideal opportunity to take stock, to look to the longer term and to showcase the fundamental attributes of UK real estate – features that, with the right policy support from government, should continue to secure its future as a major economic contributor and high-performing asset class.
We are a long-term industry – buildings, places and communities aren’t designed, built and brought to life in a day. Once we leave the EU, businesses in the UK will still need the infrastructure to operate – offices and other types of business premises, logistics facilities, etc. – and all of us will still need high-quality homes at different stages of our lives, as well as retail and leisure facilities in which to meet and relax. Indeed, it is arguably more important than ever that we create, over the next few years, the physical infrastructure that will support the UK’s new future outside the EU.
The health of the UK real estate industry and the broader economy are inextricably linked – we contribute about £95bn (€112bn) to the UK economy each year and support most, if not all, economic activity through the physical environments we create. The value we create also ultimately supports the financial health of individuals up and down the country through the pensions and savings we look after. Events such as MIPIM are a timely reminder to everyone not only of this contribution but of the way in which our industry underpins delivery of many of the government’s social objectives – education, healthcare, strengthening communities and ensuring everyone has access to good-quality housing.
The mission of the British Property Federation is to represent the UK real estate industry and showcase its achievements. Over several days at MIPIM, we and others will be running a range of events looking at different issues facing the industry and at the potential of different asset classes within the sector.
It’s also important, amid the noise surrounding Brexit, that we ensure the commercial real estate industry’s priorities are heard and understood. We recently published our five-point manifesto for a positive future for the UK and for real estate. At its heart is the need for government and the real estate industry to work in partnership. I am particularly delighted, therefore, that we are partnering with the UK government to support the UK pavilion at MIPIM.
The need to forge effective public-private partnerships to maintain economic activity and investor confidence has never been more important. A local authority’s ability to engage with both domestic and international real estate investors and make meaningful improvements to its town or city will shape the quality of people’s lives for years to come. While local authorities must offer investors a clear vision for growth, we must also recognise what we can give back in order to establish a win-win partnership. We must be able to communicate and remain accessible, provide a compelling housing and public realm offer, and provide understanding of the balance between all asset classes, such as retail, residential, healthcare, offices and logistics.
“MIPIM provides an ideal opportunity to take stock, to look to the longer term and to showcase the fundamental attributes of UK real estate – features that, with the right policy support from government, should continue to secure its future as a major economic contributor and high-performing asset class”
Our manifesto calls on the government to provide a fair, stable and predictable tax system and to simplify and focus the planning system on delivery; to invest in infrastructure and make more land available for development; to ensure the UK can continue to attract the skills it needs (in particular, to help us address the skills shortages in construction), and to work with us to deliver homes in the right places across the country.
A great example of how the industry and government can work together to shape the future can be found in the recent housing white paper. The BPF has long championed the role of a new high-quality, purpose-built and managed-rental offer – build-to-rent – in helping to tackle the UK’s housing challenge, and pointing to the billions of pounds of new investment available given the right signals from government. Simultaneously, with the white paper, we published our own report for the sector, jointly with Savills and the London School of Economics, which shows that on large urban sites, well connected to employment markets, build-to-rent can accelerate housebuilding three-fold.
The housing white paper set out a new framework for housing delivery in the UK, and marks a significant shift in policy from focusing on demand-side measures aimed at increasing housing supply across a range of tenures. Build-to-rent has finally come of age and been singled out in the national planning policy framework, providing a clear steer to local authorities of its important contribution and how to treat it, including the acceptance of discounted market rent (now to be known as affordable private rent) rather than the familiar affordable homes requirement.
If we are to achieve a step change in delivering housing, we will need to build more quickly, efficiently and with less waste. Innovation will play an important role in achieving housing targets. The government’s measures to embrace this will be a major boost for those in the vanguard of modular construction, which sits well with products like build-to-rent. When you are running a housing factory, you need volume and steady throughput, which the rental sector can offer.
MIPIM this year, as it always does, will bring together property industry professionals from all corners of the world. The opportunity to make new contacts and forge new relationships has always been at its core – but we anticipate that partnership will dominate discussions this year more than ever as the UK looks to a future few anticipated a year ago.