By Angus White MRICS, Partner at PAI member Naylors Gavin Black
In the not-too-distant past, the North East was considered by some to be a bit of a charity case. Investment here was frequently subsidised and supported with state intervention – usually from the European Union. If you’d asked people outside of the region, I expect most would talk about declining industry and empty lots. Auf Weidersehn Pet did nothing for our reputation.
But in 2022, our region conjures another image; that of an area at the leading edge of innovation. One of tech start-ups, gigantic giga factories and huge developments bringing even bigger opportunities to work, live and grow here. One that is standing on its own two feet with strong interested from private sector investors.
I and several colleagues, will be joining the Newcastle-Gateshead delegation at MIPIM (which, in French, stands for Le marché international des professionnels de l'immobilier), which showcases great cities of the world to investors each March. The massive event, held in Cannes, France, attracts property specialists and investors from around the world with billions of pounds-worth of deals done across four days.
There is an excited energy among property professionals about this year’s event, which will see more than 26,000 delegates from 550 cities in over 100 countries vying for the attention of investors. But our aim goes beyond highlighting individual investment and long-term growth opportunities; we will be demonstrating that our region is well-prepared for a post-pandemic boom.
After being postponed for the previous two years due to the pandemic, this is probably the most important MIPIM in the history of the conference - at least for the North East of England. We are coming with momentum behind us, highlights include: the BBC’s £25m investment into the region, billions of pounds for two giga factories, the landmark £300m Newcastle-Gateshead Quays development, and the recent £305m takeover of Newcastle United. All this means we arrive already in the international spotlight.
Although our team is working with Newcastle, we are keen to support the entire region, which is also alive with opportunity. Durham City is proving that new developments can thrive in a historic setting. Its 450,000 sq ft Milburngate development on the banks of the River Wear is delivering office, retail, leisure, and residential space to the city, bringing 21st Century architecture to a millennium-old city. In Sunderland, Riverside Sunderland is, at £500m, the biggest investment taking place in the city. The masterplan will transform a 33.2 hectare site across both sides of the River Wear in the coming years with a mix of homes, leisure and offices. Buildings already taking shape as part of the transformational scheme include the new 190,000 sq ft City Hall headquarters.
Britain is an attractive investment opportunity in the post-Brexit, post-Covid world. Our economy is set to outpace every nation in the G7 this year - and the North East is leading the charge. According to the UK’s largest job site, Indeed, there are 67% more job vacancies here compared to February 2020, just before Covid gripped the world. A sign that business is flourishing and expanding.
As a matter of fact, the latest NatWest UK Purchasing Managers Index, which monitors month-on-month output across the manufacturing and service sectors from UK regions, shows that the North East has a strong pipeline of new business and confidence in its future prospects, despite a marginal reduction in output most likely caused by ongoing supply chain issues
And when it comes to attracting foreign investment, we’ve maintained our lead over all other regions of the UK, other than London. According the North East LEP’s Our Economy report, foreign direct investment created 1,373 new jobs in 2020/21 and foreign-owned businesses contributed 26% of our Gross Value Added figure.
Probably the strongest indicators of the growing confidence and opportunity in the North East property sector is that we are actually attending MIPIM. We are the only major Northern city represented. The absence of Manchester and Leeds is noticeable. Now is our time to shine.
We’ve always been an area filled with go-getters and there is every confidence we will bounce back strongly from the pandemic. We were at the forefront of the industrial revolution and now, the government seems intent on addressing regional inequalities through its recently created Department of Levelling Up. This is all very important and the relationship to property is critical. Our built environment is a physical embodiment of the state of our region. High quality buildings which are environmentally friendly provide the space for us to work live and play, they are also a large part of the region’s financial asset base. For too long the North East’s property values, both residential and commercial, have been far too far behind those elsewhere in the UK. If a business wants to borrow using the equity in its factory or office as collateral, it will have less scope to do so here because values have traditionally been lower. If levelling up succeeds in increasing the value of our property assets it will have given our business and home-owners more resources for long term investment and permanently reverse the decline experienced by previous generations.
There is a saying that ‘luck is when preparation meets opportunity’. Our team has prepared carefully to put the best case forward for the North East when we visit France. We have some of the most dedicated evangelists for the North East to make the arguments to investors and they are supported by a strong set of facts about our region. That we can visit this global showcase and present our case as equals among some of the world’s greatest cities speaks volumes about the confidence and positivity that is a new hallmark of the region.