Partner Article

Shy bairns won’t win over the investors

Kevan Carrick is a partner at JK Property Consultants LLP, the policy spokesman for RICS North East, a mediator and Chairman of Northern Dispute Resolution, a mediator appointment service.

I have spent the last two days at the 15th Annual European Real Estate Opportunity & Private Fund Investing Forum.

A London-based conference dealing with global real estate investment, I had the pleasure of moderating a panel to address “Large Fund Investment Strategies: How to Increase Deal Flow in an Evolving and Challenging Climate”.

There were lots of lessons learned of what the investment fund asset manager and their investor client are looking for. It was also an opportunity, thanks to the Newcastle/Gateshead Initiative, to mention our home city and to raise profile.

It was very clear that there are increasing amounts of money flowing into the real estate sector. The objective is to secure a long-term stable income. The challenge was to assess the diminishing returns from the ‘gateways’ cities, such as London, Frankfurt, New York, etc.

Some funds will continue to invest as yields diminish but some will look to find other investment opportunities in the core cities and other European regions. It is this market where we in the North East can gain.

We have numerous opportunities from ready investments, the residential private rented sector and major development schemes, such as Science Central, East Pilgrim Street, Stephenson Quarter, in Newcastle, and Baltic in Gateshead, the latter being announced as a major development opportunity for a mixed-use scheme.

The art now is to shout loudly, over the clamour from other regions and cities, to make sure that investors know there are good opportunities in our region. Certainly NGi are trying hard to do so but I would like to see a more collaborative effort and approach from the Combined Authority to give us a stronger voice from the North East – a theme I have and will continue to push!

Having spent some time speaking to decision makers at the forum, there is clearly interest and appetite for investment in the region. These funds are under competition from other regions and borrowers to give attention to their requirements. They will be focussed on what is put in front of them for consideration, even though there are more funds getting involved in real estate investment.

It is no good waiting to get their attention, we must adopt the adage of the North East ‘shy bairns get nowt’ and push our opportunities to the fore. We have seen some collaboration amongst the Combined Authorities, for example their involvement with the private sector at London’s MIPIM UK (again something promoted by NGi). While that has been a help, hopefully is a precursor to greater collaboration and activity to drive investment to the North East.

We have seen that there is demand for finance to kick-start development through the NELEP Investment Fund, but it will take a much bigger amount of money to deal with the levels of investment needed. Even though I am sure that the NELEP Investment Fund would willingly collaborate with funders and investors to help to move things forward.

As I have said there are a number of development proposals but these by and large are dormant, with each needing financial investment to kick start them – here is the opportunity.

Kevan Carrick Partner at JK Property Consultants LLP

This was posted in Bdaily's Members' News section by Astute.Work .