Regional cities must take the lead in rebalancing the London-centric investment market, think tank says as figures reveal London captures half of the country’s commercial property investment.
A new report from Centre for Cities urges cities across the North, Midlands and Wales to improve efforts to attract private sector investment by taking steps ‘to strengthen their local economy by improving transport, skills and housing.’
The report, compiled with support from Capita, found just over half of all investment in Britain’s commercial property market in 2016 – worth over £43bn in total – was spent in London.
It also found the South East, the second most successful region, secured nearly £5bn of investment, equivalent to 11% of the total share across Britain.
In contrast, regions such as the North East and Wales gained less than £1bn of commercial property investment each last year, with Wales attracting just 1% of the total share of investment across Britain, the smallest amount of any region.
The report highlights five key characteristics investors say they look for when deciding which cities to invest in and urges regional cities to adapt to them.
They include a strong city economy with growth potential; excellent transport connections; a pro-investment leadership; a strong focus and record on delivery; and a distinctive reputation.
‘With the shock general election result and upcoming Brexit talks causing considerable uncertainty for the UK economy, the onus is on cities across the country to secure more of the investment needed to boost local and national economic growth in the coming years,’ said Andrew Carter, chief executive of Centre for Cities.
‘Investors tell us that regional cities are an increasingly appealing prospect because of London’s high property prices – now these places need to take advantage by ensuring they are as attractive and open for investment as possible.
‘This means taking steps to strengthen their local economy by improving transport, skills and housing.
‘But it also means actively promoting the advantages they offer, building stronger relationships with investors, and intervening when necessary to ensure big investment projects get over the line.
‘By doing so, regional cities across Britain can play a big role in ensuring more investment is spread beyond London and the South East.’
Commenting on the report’s findings, Deborah McLaughlin, head of housing delivery and strategy, Capita Real Estate & Infrastructure, said: ‘Attracting capital investment is vital to local authorities.
‘Now more than ever, our local authority partners are working with us to develop their understanding of what motivates investors and developers, allowing councils to unlock value in their region to stimulate economic growth.
‘The report showcases a number of local authorities which are reaping the rewards of investment, enabling them to create prosperous and connected places.’