Blog: Place Partnership and One Public Estate
Managing director, Andrew Pollard reveals his thoughts on what the year will bring for Place Partnership.
January provides an opportunity to review what the year ahead might hold in store for us as a regional property business and for the market generally.
Whilst 2017 was undoubtedly dominated by Brexit concerns, the UK property investment market finally shrugged off Brexit-blues after the Summer and focus was again on what really matters: quality of income and covenant strength, plus the property fundamentals.
In 2017 the market was underpinned by overseas money as has been the case for a while. It will be interesting to see whether the surprise announcement in the Autumn budget of a consultation exercise on whether to bring disposals of commercial property by overseas investors within the scope of capital gains tax has any impact.
The other area of investment that has been notable has been by local authorities seeking income. It is clear that the public sector is increasingly looking to a variety of ways of producing income to help address increasingly stretched finances. Property may well be one of these, but dangers surely lie ahead if the market being invested into is not well understood or there is a lack of proper asset management capability – generally speaking property must be worked to achieve the right kind of returns.
UK export-led industrial production continues to beat forecasts meaning a buoyant sector – which lacks appropriate space. In relation to smaller industrial units, this is an area crying out for public sector investment, where the private sector is unable to fund supply, particularly where there can be a boost to the local economy also.
The Government has announced significant new investment into housing, (for which there will be public land release), R&D and infrastructure.
In our region the significant rail infrastructure investment into Worcestershire Parkway and HS2 will boost the Midlands economy, plus the announcement of Coventry as City of Culture 2021 and Birmingham hosting the Commonwealth Games in 2022 – the Midlands are on the up!
One Public Estate has put housing right at the top of the agenda and Worcestershire County Council is being innovative in wishing to see the development of a Local Housing Model agenda. With the well reported constraints on supply coupled with growth pressures across much of the UK, it is likely that housing will be a major driving force politically for many years to come and Place Partnership can play an important part in the delivery.
Carillion’s demise shows that major FM and construction outfits are not too big to fail and as a public sector owned mutual our model can offer a valuable alternative on a regional scale, one that is more attuned to the customer.
Overall then, there is much to be optimistic about, many challenges lie ahead, but as always with property, a long view is required and the experienced will prosper in any market.