Tag Archives: London

mipim UK

Last week saw the launch of mipim UK in London. Whilst the organisers and name of the event may be consistent with the annual property pilgrimage to Cannes in the south of France, the event in London was actually very different. Initially I was very negative about it on Wednesday, but the event grew on me through the week.

I’ve talked lots on this blog about what defines mipim in Cannes and how unique it is in terms of an annual event of value to the property market. The UK event was really more of an Expo; a collection of stands which varied from Local Authorities, Developers, Investors, Law firms and the odd Consultant. It was really a show of the regions and everyone was ‘open for business’ (?). Unlike Cannes, the action/ events outside of the conference seemed very limited. I guess a large proportion of delegates were London based so would have been visiting the event, rather than basing themselves there. I also read that 80% of delegates were mipim first timers.

Getting into the conference proved a challenge on the first day as a public protest blocked the entrance to Olympia and even involved mud being thrown, literally. See the Guardian piece on it here.

The talks (well, the ones I could actually get into!) were focused on; a) the seemingly infinite expansion on London fueled of course by foreign investment, and b) The future of our regional cities. The exhibitor presence seemed to major more on the regional cities than London. One key observation was that Manchester and Liverpool shared a stand; promoting a collaborative presence, rather than competing. It seems that George Osborne’s Northern Powerhouse idea has gained much momentum and support already.

Key themes which emerged from the event were;

  • Supporting devolution of power from Central Government to the Regions.
  • The long term impact of overseas Investment on the UK property market.
  • How to promote the regional economies, with HS2+3 being hailed as the answer to all.

Nottingham had a ‘proper’ presence at this event which was good. They had a brand new stand in a prime location – this was much better than the rather generic “D2N2” version used at mipim in Cannes.

On Friday I attended an interesting talk on Tall Buildings in the UK. On the panel was president elect of the RIBA Jane Duncan. One of her key messages at the moment is to promote the importance of having the best quality Planning officers within our UK Local Authorities.

We’ve been facing a few frustrations in recent months on new projects, as LA’s were quick to cut back their Planning Departments in the recession and now they are feeling the strain. The positive outcome of new buildings is heavily influenced by the Planning Process and to be quite honest our system is still pretty weak it seems to me, particularly with the new pre-application process. The key issue is that LA’s don’t see Planning as ‘income generating’ (?!). Rees Peter Wynne, who is a Professor of Places and City Planning, at UCL suggested that if we want to take Planning seriously in the future, they should teach more about it a Eton College as that’s where our future leaders seem to emerge from.

So was it worth it? I think so. I saw a good number of people I know, including clients who I spent time with. I also made a number of new connections which was useful and will hopefully lead to new opportunities.

Mipim of course is not about instant results – it’s all part of a rich organic web of profile raising and relationship development which, if managed properly, will lead to new work down the line.

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The UK Construction funnel problem

Earlier this year I attended a conference in London where Mark Farmer of EC Harris articulated some serious concern about the volume of construction activity in the pipeline and the likely ‘blockage’ that would occur with Main Contractors and Sub-Contractors, specifically in relation to their ability to respond to market demands. The issue being a lack of resources – and materials in some cases (brick availability being a big problem).

It seems that investors and developers have funds and are pushing projects forward at pace now – some of which are large, especially in the Residential sector. However the anticipated delivery/ supply chain blockage is now being realised…

UK Construction Funnel

At present we are engaged in the development of circa 3500+ Residential dwellings in London on numerous sites. In addition, following recent instructions, we have a fairly similar figure again in the UK regions – Manchester being a particular hotspot. Our Residential team is continuing to grow with our group team nearing 130 staff in recent weeks.

Our work winning success seems to be as a result of our focused/ efficient operating model, the scale and diversity of our team experience, and our extensive use of BIM. A big strategic focus for the group is on diversification and this is working very well for us. We’ve recently been appointed on Student Living, Education, Industrial and Healthcare related projects, in addition to our existing ever growing port-folio of Residential, Retail and Leisure work.

One thing that’s fueling the surge of major projects in construction is the significant interest and activity in the emerging ‘built to rent’ or ‘private rented sector’ (PRS), to deliver large Residential products, these are funded by institutional and international funds. This is something we’re involved with at present.

Our London projects are perhaps proving the most challenging at present, in terms of Tender dialogue, as Main Contractors are needing to be very selective about what they can physically handle. Furthermore sub-contractors are struggling to respond to pre-construction programme demands in terms of finalising designs and cost plans.

So the wider impact of all this could be significant, with cost plans rising and construction programme’s becoming protracted in some cases. It’s been reported in the press over the last week or so that brick layers are earning £1000 a week now. There’s a sense of the tail waging the dog here!

This issue won’t resolve itself quickly. There is now a clear skills and resources shortage in the Construction industry which simply can’t handle the current demands of the Property and Investment sector.

There’s a real irony here of course; The Construction sector has been the worst affected by the recession, by some margin. Now the recovery has recently occurred so quickly that the sector simply can’t cope with demand. It will be interesting to see how this unfolds in the 12 months as developers and contractors race to complete projects on site.

So whilst we as architects are incredibly busy bringing new developments to market, the challenge will remain for sometime yet in terms of building these on site effectively.

Mind the Gap: London vs The Rest

In the days before the recession, now a distant memory, London seemed to be an integrated part of England/ UK in property terms. It’s always performed extremely well, but comparisons were still made with ‘the regions’, i.e. other UK cities. More recently London has continued to grow at a phenomenal pace – throughout the recession, whereas the regions have all but stopped in relation to investment/ property development. Thankfully the regional cities are waking up again now and the future is certainly looking brighter for the UK as a whole. However, the spectrum between London vs The Rest is probably the widest it’s ever been.

At MIPIM recently and also in the press, particularly in relation to the strong recovery we are seeing in the residential sector, comparisons are still made between London and the regions. This continual comparison is starting to frustrate me as I think the relevance of this has diminished. I work in both the regional cities and London on a weekly basis so I’d like to think I can see this from both perspectives here. Londoners are only really focused on London – so too are international investors. The regional cities seem to take the view that London is over heating and that the regions should get ‘their share’ of investment/ property development activity. Why?

Evan Davis recently presented an insightful two-part programme on the BBC which considered this very issue. This was a good review and was very much focused on investment/ real estate comparisons. Looking back at history he illustrated that at the peak of the Industrial Revolution, the middle of England; cities like Liverpool, Manchester, Leeds, Sheffield, Nottingham and Derby were significantly higher than the rest of the UK, including London, in economic terms.

London connectionsToday, London performs substantially better than the rest of the UK. To give a sense of this, Residential values in Central London are peaking at levels of £3000ft2 – or in extreme cases up to £6000ft2. Whereas the regional average is around £350ft2. The average house price is the UK is £180k and it’s size is typically between 800-1000ft2. Therefore a house of this size in London would probably fetch around £2.7m. Values have risen in the last year at a UK average of 9.5%, whereas as London has increased by 18%.

London is unique in the context of the UK, now more than ever. It’s a global city; THE global city in fact. It attracts substantial international investment, but why is it so unique? There are many reasons, here’s a few;

– It sits geographically and timezone wise ‘in the middle’ of the global money markets.
– It is politically stable/ safe.
– It has the most universally used language.
– It’s offers a wide range of lifestyle/ cultural diversity.
– It has a strong sporting offer.
– It’s has a wealth of English heritage/ history.
– It’s incredibly well connected on both local and global levels.
– It has a strong and diverse concentration of people/ demand.
– It attracts the best talent in most sectors, both domestically and globally.
– It has a substantial number of educational institutions.

London is an incredible success story and I have no doubt it will continue to perform well for the foreseeable future.

But, it my view the UK regional cities should not try and compete with London. They can’t. There is definitely a lot to learn and observe in terms of what London has done well, but regional cities need to focus on defining themselves on a more domestic level. Connectivity into/ out of London is clearly really important for the regions.

MIPIM saw most regional cities flying banners with the usual message; ‘We’re open for business’, but is that enough? Accepting that London is now a firmly established global city, perhaps there is a strong argument to suggest that a National/ Domestic capital city should be identified. Would this help promote the wider UK? In my view Manchester is the only contender and is already the UK’s second city. If Manchester were to be named the national capital, would this give middle England some stature?

British Suburban Utopia?Most cities have pretty poor quality office provision today, with a lot of 1960’s stock – most of which is being pushed down the Permitted Development route to convert them to Residential. Will these be sustainable? (in commercial and environmental terms – and in the context of the city fabric), or are we just creating a bigger problem for the future? These buildings should probably be demolished and replaced. I accept that this is challenging financially, but it’s probably one of the biggest nuts to crack. In terms of Residential dwellings, getting people back into the cities IS important. And not just that, providing a strong mix of dwellings to suit all ages is important – along with facilities like well performing schools (this being a big influencer in house purchases/ values). The UK, again linking back to the Industrial Revolution, has a mentality/ habit of the wealth pushing out to the green areas. This seems less of an issue in mainland Europe. City living is far more common out there. Can the UK accept that City Living works? It should certainly be affordable which references another issue with younger people trying to enter the market.

This is a complex and never ending subject. My point today is two-fold;

– London is distinctly separate from UK regional cities and people need to accept that.
– The regional cities need to find a way to make their cities work and provide the ingredients that London boasts; City living for all and the very best commercial offer. The latter should not, in my view, be concentrated on Local Enterprise Zones if these are outside of the city centres. This will make the social/ economic problems worse by making the commercial centres ‘suburban’.

My MIPIM 2014

It’s been another busy and exhausting, but enjoyable and productive, trip to Cannes for me. This is my third consecutive year at MIPIM and I’d say this trip has been my most successful to date in terms of outcomes. The really important bit now is the follow-up’s. The atmosphere has been better as well; London is booming and there are strong signs of a return to property investment and development in the regions going forward.

Beyond the many meetings and getting some great new contacts/ leads/ intel and opportunities, some of my defining highlights this week for me have included;

– Getting a selfie with Boris Johnson! – Not sure who the Photo-bomber was!? You can see the MIPIM keynote address by the Mayor of London by clicking here.
– The excellent Shedmasters lunch up in the hills.
– Dinner with friends of Innes England and Cricket legend Derek Randall.
– Meeting footballer, turned Property Developer, Gary Neville on the Manchester stand.
– Lunch with Willmott Dixon and Louise Brooke-Smith, who will be appointed global President of RICS later this year.
– Getting some good Twitter coverage in terms of retweets.
– Seeing the Invest in Nottingham video to promote the City. It’s edgy, fresh and dynamic – click here to see it
– Finding the ‘New London’ App recently launched by the NLA and Estates Gazette. It’s an interactive map of all London boroughs and provides key information on all major developments – a very useful tool to have. You can download it by clicking here.

One of the most interesting points I picked up this week was from Tom Bloxham of Urban Splash. I spoke to him a few days ago and asked “what does the future hold for urban living?” He explained that during the Industrial Revolution the factories dominated the cities and that peoples class/ wealth determined how far out of the city they could live. Today, thanks to cities like Manchester, people are living in the city centres again. This has wide ranging economic benefits. For city living to be sustainable long term, a greater degree of diversity is required to provide housing for ALL ages/ needs, this should include older people and of course young families. A key component missing in most regional City centres these days is schools. If these can be provided, then the diversity and economy of our cities will continue to grow.

Here’s a few photos from this year…

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