On 25 November 2014, Nabarro welcomed over 30 members of the Urban Land Institute to its new office for a presentation on the highlights of its recent report: ‘Growing Opportunities: A New Outlook for UK Real Estate’, followed by a panel discussion on UK real estate investment prospects.

Clare Thomas began the event by outlining some of the report’s findings, notably that there has been a marked shift in the investment patterns of investors and developers with many now turning to key cities outside of London and alternative assets such as the private rented sector for investment opportunities. A full copy of the report available to read here.

Paul Omerod then provided guests with an insightful overview of how impending changes in the political and economic landscape might impact the property market. He explained that we can expect a slowdown in growth rates over the short term, driven by uncertainties linked to the political events on the horizon, notably the general election in 2015 and the 2017 EU referendum. Overall, Paul remained positive about the UK economy in the long term, even citing his home town of Rochdale as a key example of economic recovery now becoming evident in smaller towns outside of London.

The event was topped off with a panel discussion comprising Alan Patterson – AXA Real Estate, Ian Whittock – Knight Frank Investors, PJ Thibault – Cushman & Wakefield and  chaired by Ciaran Carvalho, which focused on risk, location and alternative assets. The panel agreed that in the short to medium term, the risk of investing in the UK real estate was relatively low. Although it was acknowledged that if the Bank of England continues to maintain an artificially low interest rate, there is a danger that the property market will become distorted.

 On the subject of location, the report showed that 51% of respondents believed that there is still value in London commercial real estate but 86% of respondents felt that it was the attractiveness of regional real estate that would increase over the next couple of years. The panelists agreed that foreign money is still pouring into the UK and that many investors are beginning to feel that regional assets offer better value for money compared with London.

 When it comes to asset classes, the panelists provided some further detail to the Nabarro report. This indicated that there was an increasing appetite for alternative assets such as private rented sector, student accommodation and hotels. Whilst new international investors may be more open to looking beyond the traditional asset classes for investment opportunities, the panels view was that many traditional investors remained cautious about the profitability of alternative assets.

When the question “Where is the growth going to come from” was asked, it was remarked that as a mature economy in the Western world rather than an emerging market, investors should be focusing more on income rather than expecting strong growth rates. However, the panel felt that compared to the rest of Europe, the UK was doing very well and the outlook was positive.