The UK had a harder sell than normal at MIPIM 2019, given the continuing wrangling over Brexit, with one building surveyor describing the country as “uninvestable”.
But a high-powered American had a very different view of the state of play.
Mark Slaughter, director general for investment at the Department for International Trade, gave the keynote speech at the “UK Cities – Investor Sentiment” panel at the international property conference. Slaughter was previously Asia-Pacific head of corporate and investment banking for Citigroup.
“It’s a little unusual to hear an American-accented person representing the UK. My interview process was quite complicated because of that. I had to spend the first 30 minutes explaining why an American banker in Hong Kong wanted to join the UK government at this point.”
He added that despite the headlines and current uncertainty, he remained convinced the UK offered all the right ingredients to sustain high levels of investment. He also said the department was ramping up its activities as the UK inches towards leaving the European Union.
“As an investment destination, despite the press, the UK continues to attract more foreign direct investment than anywhere else in Europe and the third-most in the whole world. International companies continue to want to invest in the UK because we are a liberal economy with world-class talent and a flexible labour market. We have competitive taxation and a stable regulatory environment. The legal system is also a critical component and it only takes up to 13 days to set up a business in the UK.
“We are determined to make the UK the best place for international investments – and keep it that way. I can’t predict the outcome of Brexit, but policy remains that we leave the EU with a deal and the long-term fundamentals of the UK, regardless of short-term political process, I think are fine and attracting investment. When we finish resolving how we leave the EU, I think those structural fundamentals will be sufficiently strong to continue driving economy forward.”
Regions to drive investment?
The panellists were also largely bullish about the UK’s prospects. Miles Ede, co-head of real estate at law firm Addleshaw Goddard, said: “People are looking for a safe environment to invest and the UK fundamentals tick all those boxes”.
He added that there were also a growing number of opportunities to invest in regional cities. “Over the past 18 months to two years we have seen investors being prepared to look further afield. For me the key is: has the local authority got the will and ability to drive the development?”
David Skinner, managing director, real estate strategy and fund management, Aviva, said he was particularly interested in Birmingham. “Birmingham is on our target list – we would like to do a lot more in the city.”
But Waheed Nazir, corporate director, economy, Birmingham City Council, said there was more money than opportunities in the city. “Our challenge is finding enough available land for investors,” he said, adding the city’s growth strategy will be driven by improving infrastructure such as High Speed 2 which is due by 2026.
And Mat Oakley, head of Savills UK and European commercial property research team, warned that the UK’s economic growth prospects were bleak, which would lead to weaker demand for real estate. “You can’t put lipstick on a pig – the economic outlook for the UK is not that great. The country is projected to grow by 1.5% per year over the next five years, which implies lower than normal growth. However, the key word is comparative. France and Germany are growing at exactly the same rate.”
Elsewhere, Sir Nigel Knowles, special adviser on international trade and investment to the Sheffield City Region mayor Dan Jarvis, said Sheffield was “in good shape”. He added: “We have hundreds of companies that make products that are bought all around the world. So we have a global market. Over the past 18 months we have had McLaren and others showing interest in the region.”
But for British Land, which focuses nearly exclusively on building campuses in London, it will take a bigger step change for it to build a community in the regions.
“We need strong economies and big enough populations,” said Kelly Cleveland, BL’s head of investment. “We like to invest in scale so we need a decent population.”
On the panel
- Kelly Cleveland, head of investment, British Land
- Miles Ede, co-head of real estate sector, Addleshaw Goddard
- Sir Nigel Knowles, special adviser on international trade and investment to Sheffield City Region Mayor Dan Jarvis
- Waheed Nazir, corporate director, economy, Birmingham City Council
- Mat Oakley, head of European commercial research, Savills
- David Skinner, managing director, real estate strategy and fund management, Aviva
- Chaired by Damian Wild, editor in chief, EG
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