Predictions & Resolutions Briefing 2017 – Bringing world events back to London

  

CoreNet’s Predictions and Resolutions Breakfast Briefing has become a UK Chapter standard.  Every year we invite three individuals from across the industry to provide us with their take on the property market, from the point of view of the occupier, landlord and agent. 

 

This year the format was changed slightly as we were lucky enough to have Penny Mordaunt MP, who was appointed Minister of State for Disabled People, Health and Work last year to give us the government’s perspective, alongside Chris Urwin, who leads Aviva’s global real estate research team, and Julian Lyon, a director in Savills’ worldwide occupier team.

 

Penny Mordaunt’s Predictions & Resolutions:

  • Uncertain times ahead with Brexit, Trump and China looming large.
  • Trump’s presidency offers the opportunity to reset relations with Russia.
  • We need to improve employment and life prospects for the mentally disabled, who being less visible, are often less understood than the physically disabled.
  • Government’s working on a Green Paper, currently out for consultation, which is looking at how employers can improve access to work for all types of disability.
  • On disability access, Penny pointed out that only six of the premier league football clubs currently provide disabled facilities; on the Equalities Act she said that proposed changes will lead to improved access to public transport. Penny also noted the potential for Google to create a disability map of the UK.
  • Many entrepreneurs are providing workable solutions to their own disabilities and need to be encouraged as they support the wider economy. 

 

Chris Urwin’s Predictions & Resolutions

  • Despite Brexit, market conditions seem to be currently more favourable than originally feared.
  • A ‘Hard Brexit’ could threaten us with ‘Little Britain’ and a long hard slog.  Central London would be the most exposed with the inevitable loss of jobs, whereas the regional offices market is likely to weather the storm and offer more investment opportunities.
  • The impact on the retail market is already beginning to show through higher prices and an increase in the CPI, while wages remain static, squeezing consumer spending. 
  • The labour market is showing signs of slowing with retailers especially affected, though logistics still seem to be in good shape.
  • Trump’s presidency creates uncertainty, which is affecting global markets and will be further impacted by the forthcoming elections in France, Germany and the Netherlands.
  • The global economy is in better shape than it was 12 months ago and the European economy has just had four good quarters.
  • Cambridge, Manchester and London are hotspots driving the growth of the knowledge economy
  • Investors need to remain focussed on the long term rather than the short term.

 

Julian Lyon’s Predictions & Resolutions

  • Triggering of Article 50 will lead to a two-year process of withdrawal, but it will take 10-20 years to analyse its success or failure
  • For real estate occupiers, London, Washington and New York are key locations and where the battle for talent is the number one concern. 
  • The shock of Brexit in London has caused a medium term hiatus – occupier costs are ratcheting up, surveys chart clients reducing property holdings or staying put – all of which tend to show that the current recovery could be fragile.
  • In manufacturing, the weaker pound makes UK labour look cheaper than France or Germany, but productivity needs to improve if we wish to stay in the game. 
  • For corporate occupiers, we can expect improvement in choice and a stabilising of headline rents, a greater sense of responsibility towards disabled workers (echoing Penny Mordaunt), a greater interest in the happiness of workers and a productivity gap between private and open plan offices
  • Predictions included a revaluation of business rates, accelerating changes due to incoming lease accounting rules and improving technical innovations, as well as improving access for the disabled. Finally, Julian’s resolution was to fix Guildford Town Centre.

 

Outgoing President, Philip Cohen took over as moderator of the Q&As to give the audience his not too serious predictions for the year ahead. He hoped that his first prediction would not come true: that Marine Le Pen will win the French Presidency elections, and his second prediction was that Leicester City will become the first winners of the Premiership title to be relegated next season.

 

The breakfast briefing closed with newly announced UK Chapter president for 2017, Ben Johnson thanking Philip for his drive and enthusiasm in restructuring the Chapter’s executive board and committees and for keeping the Chapter at the forefront of CoreNet worldwide.

 

Coming up next month is CoreNet’s One Big Day, which will focus on the theme of ‘resilience’ and will host a line-up of A-list speakers to discuss and debate a wide range of topics and trends affecting the industry today. Booking is now open for the event on Wednesday 8 March.

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