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Property

If they do get the go-ahead, PIFs could make the UK a more attractive environment for raising funds, deter fund managers from moving elsewhere, such as France, and spur post-Brexit financial growth, says Macleod. In terms of competition, he argues that the existing strength of the Channel Islands in marketing their funds internationally to key investment centres such as the US, Asia and the Middle East is unlikely to diminish. In spite of everything that’s happened in the past few years – Brexit, Covid-19 and the UK tax changes – the overall attractiveness of UK property to international investors, and the use of the Channel Islands as a pathway to that investment, hasn’t really changed. Mulholland says: “Since the Brexit vote, we’ve definitely seen an uptick in Asian investors looking at the weakened pound and the strength of assets on sale, particularly in London and the South East, and they are taking the opportunity to invest in that. “We’ve seen the pound devalued over four years. Then there’s the backdrop of Hong Kong investors – we may start to see a flight of capital out of HK and into safer assets, and that could well be back to London again.” Burgess concludes: “The property investment market works in cycles, and different types of investors are interested in different things. “For example, pension funds typically need an income stream to match their liabilities. The UK economy is one of the strongest in the world, and even with Brexit and the uncertainty of coronavirus, it is still seen as a strong economic force that pension funds will continue to target. “Others are interested in using their skillset to spot or enhance the value of a property, so they are selecting property that will rebound well after Covid-19 and Brexit. There are lots of people with that strategy and they could do very well.” n

20 City edition 2020

ESG – the new dimension in real estate? If there’s one trend that’s changing the face of property investment, it’s the growing emphasis on environment, social and governance (ESG) considerations. “Whereas previously, investors in real estate funds were concerned solely about returns, no self-respecting real estate investor will now be without an ESG policy and will expect any fund into which they put funds to be equally focused on such issues,” says Richard Daggett at Ogier. “We’ve gone from a world where people talked a good ESG game to now having investors demanding it as more than lip service – and not being afraid to deploy their capital elsewhere to make that happen.” That’s especially the case where succession planning takes place and a new generation of investors is stepping up, says Donna Shorto at Praxis. “Covid-19 has been a major turning point for ESG investment,” she says. “When you have a portfolio and it’s invested in ESG, you have done very well in this time and have made good returns. “Covid-19 has given everyone the chance to step back, and people are now placing greater emphasis on corporate governance and fairness within the workplace.” ESG considerations in real estate include strong BREEAM and energy ratings, the construction materials used, and working practices. ESG could also impinge on the office environment after Covid-19. Philip Hendy adds: “Companies will provide a different environment in work, and no longer cram so many in. “The more enlightened employers will look at this quite differently. Their workplaces will be more varied and interesting, with the ability for people to get up and walk around, different kinds of seating and so on. “If you want to attract talent, to become an employer of choice you will have to adapt your ways of working.”

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Profile for BL Magazine

BL Magazine - City Edition 2020  

How well-positioned are the Channel Islands to support the UK’s post-coronavirus economic recovery? How has the pandemic impacted the UK pro...

BL Magazine - City Edition 2020  

How well-positioned are the Channel Islands to support the UK’s post-coronavirus economic recovery? How has the pandemic impacted the UK pro...

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