“It’s wise to be fearful when others are greedy and greedy when others are fearful.”
Warren Buffett’s words may sound insensitive in the current crisis, but the sentiment is clear and remains sound. When the market is confident, people get greedy and prices rise. That is a time for great caution – there is not much worse than realising you have overpaid for an asset and having to comfort yourself with less than stellar returns. On the flipside, when the market is fearful, it’s often the time to get out your chequebook.
That’s not to say I advocate taking advantage of those in trouble. We are not vultures. But at times like this, realising cash for some is a primary focus and having a ready and willing customer is exactly what is needed.
We are looking at the market now as a time to invest – and in particular to look at where our investment can be put to best use.
Much of our work is partnerships with the public sector. While government at all levels is almost exclusively focused on saving lives, some minds will be set on trying to understand how we recover our economy when finally we crawl out from under this terrible thing.
If we thought the public purse was challenged by the 2008 crash, all the evidence suggests that our recovery from coronavirus will hit public funding even harder. It will take longer to get back to normality – and it will be a new normal to which we will all have to adapt. We will be dealing with high unemployment and the health service will need a great deal of support and increased investment to prepare for a future outbreak.
We’ve yet to understand the impact this will have on our high streets, already under grave threat from online shopping, and small businesses – the backbone of local economies – are struggling.
Local authorities will do all they can to help, but that takes cash. Central government will stump up – the chancellor has shown he’s ready to act fast – but we have to recognise that there is a huge responsibility on the part of the private sector to support the recovery and this is where I see opportunity.
We know from our work that successful public and private sector partnerships can deliver new public service assets and, in many cases, vital cash into local council coffers.
As the recovery policy is developed, local and regional authorities will want to densify employment opportunities, create environments that nurture innovation and entrepreneurship, unlock opportunities to build decent, affordable housing and release unproductive land for regeneration and value creation.
Only by working with private sector partners that understand this and know how to deliver a return to investors will the cash be available to fund this contribution to our recovery. So this is a call to those in our industry who can see a way to balance financial prudence with the opportunity to invest for the recovery we will so badly need.
In good public-private partnerships, everyone wins – that is the driving principle. I am not ashamed that we, as private sector investors and developers, seek profit from the delivery of great new public services. I am proud of that because the outcome also creates value for all.
Now is the time to invest in the future of communities. Our investment team is busy seeking opportunities for the sort of regeneration projects that we so value and that our country will need to drive its recovery.
This article was originally published in Property Week: https://www.propertyweek.com/insight/invest-now-in-the-new-normal/5108107.article