Federated Hermes boss: deals ‘critically dependent’ on political stability

The real estate boss of Federated Hermes has issued a plea for the next government to “grasp the importance” of the real estate industry and its impact on the country’s productivity. In an outlook paper from the investor, real estate chief executive Chris Taylor acknowledged investor and occupier demand for UK real estate had been dented in recent years by the “confluence of multiple challenges”, including geopolitical tensions, Covid, Brexit and shifting interest rates. “This has not only led to a rapid repricing of real estate markets but accentuated the existing longer-term structural trends affecting occupational demand, leading to an increasing awareness of the environmental and societal risks associated with real asset investment,” Taylor said. Investors now need political certainty and confidence in planning policy, Taylor said – including around infrastructure schemes such as HS2. The ability for big placemaking and build-to-rent schemes to attract the necessary capital hinges on that, he added. “Securing long-term patient capital from global investors to fund these new projects is critically dependent upon their confidence in the UK and its political stability,” he said. “Last autumn’s Budget turmoil caused damage to these investors’ confidence in the UK as an attractive destination for long-term investment in real assets.” He continued: “Whichever government succeeds in winning the forthcoming election will hopefully grasp the importance that the built environment can play as a conduit for not only enhanced productivity, but also delivering tangible societal and environmental benefits to our economy as a whole… The result of the forthcoming election will be key to delivering these outcomes in the built environment and the enhancement of the UK’s productivity and societal and environmental wellbeing.” To send feedback, e-mail tim.burke@eg.co.uk or tweet @_tim_burke or @EGPropertyNews