“If we are going to build back better, the property industry is going to have to be better”
IPSX joins the British Property Federation for a detailed webinar covering issues around social impact, transparency and carbon footprint
London, 25 June 2021: The International Property Securities Exchange was pleased to support the British Property Federation (BPF) in a webinar entitled ‘Build Back Better – why real estate investment is the key for a brighter future.’
The panel was chaired by Melanie Leech, the Chief Executive of the BPF and included Peter Freeman, Chair of Homes England, Adrian Benedict, Head of Real Estate Solutions at Fidelity International, Jackie Sadek, Chief Operating Officer of UK Regeneration and Sarah Forster, CEO & Co-Founder of The Good Economy. IPSX was represented on the panel by Rob Bould, Non-Executive Director.
Up for discussion in this wide-ranging webinar was the desire to meet net zero targets and the transformation of town centres of which over 200 were highlighted as being “failing” in some way.
Both challenges will require substantial investment in real estate, but the social and environmental benefits of this investment are likely to be much bigger than just the ‘traditional’ financial benefit. The panel explored how best the industry can capitalise on the rise of impact investment to attract further private capital to address these challenges and whether new measurement frameworks and investment partnerships are now required.
“If we are going to build back better…the property industry is going to have to be better,” was a key statement from Jackie Sadek, COO of UK Regeneration and she was supported by the panel with Adrian Benedict of Fidelity framing the conversation around the shift in shareholder expectations: “For the past 40 years, investors have had one sole purpose which was to extract and maximise shareholder returns…investors are increasingly challenging that notion and saying actually we want you to be measuring a number of other different outcomes.”
Rob Bould of IPSX commented “We need to access different sources of capital if we are going to Build back Better – and that means finding a way of attracting retail investors into real estate in a liquid and regulated way. We have a contracting open-ended funds market and my prediction is that we won’t have open ended funds in future due to their liquidity challenges.”
Rob also made the case for community investment saying: “We’ve seen the effects of PFI where there wasn’t a fair sharing of risk. The facts of the matter are that the risk stayed in the public sector. I believe that those 200 towns will only come back if you have the expertise of the private sector delivering opportunities to invest and to fractionalise, providing new opportunities for the retail community to invest.”
Sarah Forster struck a measured tone as she highlighted the growing trend in considering the social impact towards investment in property and regeneration: “I speak with investors in social housing who talk about yield and return when really it is about people and homes. We look at the social value – what’s in the best interests of society and how to integrate impact considerations into traditional financial considerations.”
What Sarah touched on was the need for investors to think about the wider context of their investment decision and the theme of transparency ran through the webinar. Adrian Benedict highlighted the long-term nature of investment saying: “Are we prepared to put perfection to one side in order to move at pace?”
Fidelity are in the early stages of launching a new impact strategy and have been “pleasantly surprised” about investor appetite post Covid for such a move.
Asking the question about how much investors are willing to sacrifice in order to attain other non-financial goals has been key to Fidelity’s exploration around impact investing “Post Covid there has been a re-orientation in how people are viewing investment opportunities. They have realised that volatility is there and is going to be there for quite some time…what people are looking for is not necessarily the predictability of performance per se but that the nature of your investment is likely to be predictable.”
Questions at the end of the webinar put the panel on the spot ranging from social vision marrying with political will to more specific questions around modern methods of construction, environmental concerns and decarbonisation all expertly fielded and posed by Melanie Leech, Chief Executive of the British Property Federation.
The full webinar can be viewed below: