The UK remains as one of the world’s most exciting places to live and work – and UK real estate continues to be one of the world’s most investable propositions – despite the short-term uncertainty caused by Brexit, writes Melanie Leech, Chief Executive of the British Property Federation (BPF).
Where there is talent, there is innovation, and economic and social prosperity. The opportunities for real estate investment are irrefutable – real estate unlocks productivity, economic growth and social wellbeing through the physical fabric that it creates.
UK universities regularly lead the global university league tables. This year is no different, we have three of the top 10 universities in the World University Rankings 2018 – including the first and second on the list, Oxford and Cambridge respectively.
Also this year, the UK has secured fourth place in the Global Innovation Index and, for the first time, has topped Forbes’ Best Countries for Business survey – climbing five places since the 2017 survey. Plus, the UK has always ranked in the top ten in the World Bank’s Ease of Doing Business Index.
The list goes on. This is the reality of the UK today: a world leader in education, innovation and business. Our past reinforces this, demonstrating the UK’s resilience in the face of both global and domestic uncertainty, and our future should expect to benefit from the same.
In turn, business and real estate investors should be confident in the fundamental attributes that underpin the UK’s success – including a transparent legal system and regulatory environment – and in a government that is focused on maintaining its country’s competitiveness and status on the global stage, and that recognises real estate’s vital role in underpinning this.
Undeniably, Brexit was a shock to the system and uncertainty continues to be unhelpful, yet UK real estate quickly bounced back and has proved that the nation’s strengths still hold true. Wells Fargo led the charge for commitments to the UK following the Brexit vote – a £300 million deal in July 2016 for a new European headquarters in London. It was the company’s first ever international property acquisition.
At Kings Cross, Facebook has just announced it is taking 600,000 sq ft of office space and Google is set to open a 990,000 sq ft campus. At the iconic Battersea Power Station, Apple has said it would take 500,000 sq ft.
These companies evidently believe in the UK’s capacity to support their long-term future ambitions, and this could not be achieved without real estate investment – people and businesses require buildings and places that can inspire innovation and improve productivity, homes, healthcare and education, and the retail and leisure facilities in which to relax and socialise.
Real estate is a long-term industry. Investment and development projects span decades – and economic and political headwinds are expected and planned for – but success is predicated on public sector leadership and vision, and effective partnership between the public and private sectors. And, for the most part, the Government has heeded the BPF’s call that action should not be needlessly stalled by Brexit.
As negotiations back and forth across the Channel rumble on, the UK Government has pressed ahead with its housing and industrial strategies and has ensured national planning policy is amended to support this. Access to high-quality housing for everyone, and building the infrastructure to support sustainable communities and a more productive economy up and down the country, is at the top of the agenda.
For investors in, for example, the UK’s nascent build-to-rent sector, which recently received formal recognition in national planning policy for the first time, there is significant opportunity to support the Government in achieving their ambitions of solving the nation’s acute housing shortage.
The UK’s Foreign Secretary during his speech in the United States this week said that the UK is currently undertaking the biggest investment in rail since Victorian times. With Crossrail across London and HS2 – directly linking London, Birmingham, the East Midlands, Leeds and Manchester – real estate investment is being supported by world-class transport infrastructure and investor sentiment is rightly positive.
While uncertainty caused by Brexit is unavoidable – and we are continuing to work with the UK Government to minimise the impact of this on the real estate industry – it is clear that real estate is an essential partner to the public sector across the country in navigating the UK’s future outside the EU.