Parliament’s series of votes on the direction of Brexit put the UK and its political chaos at the epicentre of the discussion at MIPIM this week.
As a result, UK politicians and fund managers in Cannes said they were finding dealing with and attracting investment more difficult, with some lambasting the process as “embarrassing”.
Andy Burnham, the Labour mayor of Manchester, said: “Brexit has created an awkwardness. Last week I was with a group of French mayors at the ambassador’s residence in France and I was saying, ‘Please do me a favour and don’t think that Manchester has changed.’ We haven’t been served well by Westminster.”
Damaging regional cities
As a result of the Brexit uncertainty, Burnham said the country’s major regional cities were being damaged and that more autonomy was needed for cities such as Manchester to maintain their advantage.
“The world is changing. We can’t be held back. The UK has to free up English cities. The whole Brexit debate has focused on country-to-country trade deals, which is a 20th century idea. We need to focus on cities partnering with other cities. But we have been poorly served by rhetoric and national debate which has created the impression that we are raging about everything Europe is doing and saying.
“We feel that as mayors more than MPs because we are talking to our colleagues in Europe. The UK is clinging to a London-centric world and a North-South divide. We shouldn’t accept it.”
For Darren Rodwell, leader of Barking & Dagenham Council, the issue was one that also cut to the heart of his London domain and he too was finding it more difficult to get his message across.
“What’s difficult is the initial conversation. After that most investors realise local and regional government are actually there to do a job. So, this makes the initial conversation harder because there’s hesitation and concern. It’s not doing us any good but I am very vocal about my borough, so we have fewer issues.
“Unfortunately, it’s no surprise the government can’t get through something that doesn’t work for business, people or the industry building homes for the people.
“It means I have to work harder at MIPIM to show international investors that the government is still a serious player when it comes to housing Londoners. It’s embarrassing for people trying to do a job.”
High cost of Brexit bluster
Inevitably, the Brexit bluster has come at an opportunity cost and, for politicians, managers and investors alike, the time and energy expended dealing with it has been great.
For Jessica Berney, fund manager for Schroders’ UK Real Estate Fund, the whole process risks encroaching on the efficiency and focus of her business and the industry.
“We have adjusted to Brexit as the new norm. My worry though is that we are going to be busy fools as we write all these strategy papers because we need to be diligent and cover all the bases and then they are never implemented.
“Investors are nervous, especially those outside the UK. We have a lot of investor calls to chat about what we are doing and the liquidity of the fund. We do stress-testing to see how liquid our assets are and what we could sell in three or six months.”
For those on the outside looking in, the process has provided an opportunity to draw in capital that would otherwise have been heading to the UK.
John Solberg, managing director of CBRE in Norway, quipped: “When you look at what’s going on in some of the world’s leading countries and cities – I think there might have been some more Brexit news overnight – why wouldn’t you want to invest in Oslo?”
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