18 Feb 2022
With our return to office-working back in full swing we can embark on celebrating our 60th anniversary with clients and staff in-person, and look forward to the opportunities that lie ahead for our clients in the aftermath of the pandemic. Off the back of record turnover last year, we have increased capacity in the business in anticipation of the strong demand for our planning and development services continuing throughout 2022.
As planners we are faced with responding to the rapid pace of change – climate, health and wellbeing, geo-political and economic – while planning reform flounders and the levelling-up agenda flatters to deceive (see our analysis). This blog is the first in a series examining prospects in different parts of the property market as we continue to shape our business around our clients’ needs, informed by our own thought-leadership agenda.
BlackRock’s Larry Fink writes an annual letter providing an insight into the perspective of the world’s largest asset manager. Others, such as Aviva do the same, and some common themes emerge relevant to those investing in or involved with property. Fink states that over the last four decades that there has been an explosion in available capital and that banks are no longer the gatekeepers to funding. This is evident now in our work as latent demand for good quality assets has seen a massive increase in our due diligence work, emerging from fund managers, developers and state-funded institutions. Irrespective of Brexit the UK is a safe haven for investment in land and property. More generally, the availability of capital and diversity of the market continues to fuel development activity and should help see us through a period of rising inflation, and higher interest rates, without momentum being lost.
But the availability of funds is conditional on a commitment to good stewardship, as Aviva puts it; or in Fink’s more straightforward language, “…..access to capital is not a right. It is a privilege.” Central to where investment will (and won’t) flow now and in the future is a need to be able to demonstrate a genuine commitment to Net Zero Carbon (NZC), dealing with the effects of climate change and bio-diversity gain. There hasn’t been a time, since the World War II, when planning has been so key to the future of the UK land and property sector; at this point to assist the transition to a NZC future and help our clients deliver a lot more new homes. In order to do that planning reform has to look beyond the horizon of the next General Election and genuinely simplify the system to help speed up innovation and investment in new buildings; whilst pushing a bolder NZC and bio-diversity policy agenda with the backbone of Science Based Targets (SBT). Rapid digitisation will be central to the success of this (and that’s on its way soon); alongside investment in more human resources, not less. Moreover, the Government must recognise the pivotal role of planning in dealing with the effects of climate change and delivering the development needs of the Country; while not referring to it in the derogatory terms that it has too often become accustomed to.
For our part we are on our pathway to NZC by 2030, underpinned by SBT, and we have just launched our Environmental, Social and Governance web resources Lichfields | Giving more to demonstrate our corporate social responsibility to those that wish to employ our services or partner with us. We are adapting to the ‘new normal’ of blended working, informed by the outcome of our own research report undertaken with Savanta, commissioned by Barratt, one of our leading clients Working from home: Planning for the new normal?. The welfare focus that was central to Nathaniel Lichfield’s philosophy in the early years of our business is now reflected in the success of our Wellbeing Team and the investment we make in our learning and development programme.
The future is strong and bright for those making their first steps into planning. Come and join us, it’s such a fulfilling profession and there are countless opportunities across the whole of the UK, ranging from consultancies like us to housebuilders, infrastructure providers and local planning authorities. The next exciting and unpredictable 60 years demand perception and foresight. We look forward to working with vision and discernment for our existing clients and to forging fruitful relationships with new partners during the rest of this year and beyond; and it's down to me to thank all of you, on behalf of everyone at Lichfields, who have supported us as clients, associated consultants, and former staff members, thus far on our incredible journey.
30 Apr 2020
The current crisis has inevitably meant even more headlines declaring the 'death of the High Street' in the press and amongst some property people. There are huge challenges ahead but we are at a pivotal moment. The gravity of the situation we currently face is going to mobilise energy, dynamism and innovation like never before, such that the rebound - when it comes and it will take some time - will bring a genuinely new and positive future for many of our town centres.
This is the first in a number of blogs about the future of the High Street and I start with where we are now, in the middle of a crisis.
The bad news is well trodden ground already and the situation is going to get worse before it gets better. Many town centre businesses are in distress, some have gone to the wall already and more will follow in the coming weeks and months. Landlords are faring no better; everyone is facing up to the reality of a long phased exit strategy including a lingering fear pervading amongst the population until a vaccine eventually appears.
So what is there to be positive about? Plenty in my view if you look carefully at what is stirring and it starts at the top.
Up until about two years ago the Ministry of Housing, Communities and Local Government were only really interested in planning for more homes and they didn't concern themselves that much with the potential of town centres contributing to that very important policy agenda. Thankfully things have now changed - the Government is engaged and the problems we now face should only increase the funding and resources that will be made available in the future. Putting this together with the levelling up agenda will mean more centres will benefit and there will be a better spread of investment than ever before. It might also be that the business rates holiday handed down to mitigate the effects of Covid-19 will herald much needed wholesale reform in that area, a longstanding ask of the industry.
At local level we are seeing a tremendous response from many local planning authorities to Covid-19. Our Business as (un)usual live web tool gives up to date information about how over 90% of local authorities are responding to the challenges they face undertaking pre-application and decision-making processes, amongst other things, at the current time. Some are struggling with a lack of IT investment following cuts to budgets; others are requisitioning planning staff to work closer to the frontline, dealing with such things as business rates and supporting small businesses on the High Street by providing training on selling their products via on-line platforms to create new income streams whilst their shops are closed.
I am an independent member of the Planning Decisions Committee at the London Legacy Development Corporation and was involved in its first virtual committee meeting earlier this week. The Corporation is not covered by the Government's emergency legislation but no matter; urgency powers were invoked and decision-making authority was vested in the chair, informed by discussion with committee members. There were presentations from officers and public speakers, all curated via Skype for Business. No committees have been missed so it's (almost) business as usual and this is critical to ensure that those developers proceeding with schemes are not held back.
What we are seeing is more of the best of what local government has to offer. At a time of adversity we see new leaders come to the fore, driven by a strong sense of duty to do all that’s required to help those in need. Economic development departments are all hands to the pump and we have seen strong interest in our Covid-19 Economic Risk Index as minds turn to future investment planning. With town centres very much in the policy spotlight and money available from Central Government we will see this vigour carried forward in the planning arena. More action plans and investment plans will emerge and we will see a new wave of development coming forward when market conditions improve.
What form that development will take brings me on to the last matter for this blog. Despite the decline of retail in recent years the value - actual and perceived - wrapped up in shops and the car parks that serve them has been a barrier to re-development with appraisals having to deal with very large negative starting points. But the balance has now tipped. Just as the decline in retail values shows no sign of abatement the fundamental shortage of new homes will underpin demand, and values, in the residential sector, even if recession remains a short term challenge. Shopping centres are of increasing interest to residential and mixed use developers and local councils. Retail uses will shrink to a more sustainable core offer, a wider variety of commercial and community uses will be intertwined and new homes will sit on top and around them. But there will be regional variations and different strategies for different centres. In town centres where there is no market for residential development, we should plan for a renaissance in start-ups and independent businesses combined with the re-purposing of existing space and improvements to the public realm and basic infrastructure.
The commercial property industry is currently taking a massive kick in the teeth and its focus is necessarily a short term one overcoming an unprecedented situation. Representative organisations are representing their members and lobbying Central Government hard, with a noteworthy recent proposal by Revo, the British Property Federation and the British Retail Consortium for a Furloughed Space Grant Scheme (where the state would cover the fixed costs of businesses that have experienced falls in turnover), having received much publicity.
Just as there have been major challenges for local government over the last decade responding to massive cuts in their budgets, the property industry will need to strike out of its segmented silos, cross-fertilise knowledge and ideas, and rise to the epic challenges our town centres face and seize the opportunities that always arise out of adversity. There is hard work ahead but the High Street certainly isn’t dead; long live the High Street.
Other blogs in this series:
The High Street isn’t dead, long live the high street #2 - the planning response to COVID-19
The High Street isn’t dead, long live the High Street #3
The High Street isn’t dead, long live the High Street #4 - repurposing for Alfresco Summer Dining
The High Street isn’t dead, long live the high street #5 - the Post-COVID “new norm”?