Panellists debate whether UK real estate gloom brightened by opportunities at a recent PricewaterhouseCoopers event

Published at 10:13 AM on 18 February 2009

The real estate crisis is set to get worse, according to participants at a real estate seminar in London last week. Organised by PricewaterhouseCoopers and the Urban Land Institute to present the findings of their recently published report, Emerging Trends in Real Estate Europe, the event included a panel discussion to consider the implications of the survey for the UK.

John Forbes, real estate leader in Europe, Middle East and Africa, PricewaterhouseCoopers, moderated a panel comprising: Robert Houston, global head of real estate investment management, ING; Mike Slade, chief executive, Helical Bar; Fredrik Elwing, managing director, Credit Suisse and Simon Hersom, managing director, Royal Bank of Scotland, where they debated the current state of the market.

Nearly 300 senior real estate industry professionals attended the event, described by one observer as “group therapy amidst shared suffering”.

According to the Emerging Trends in Real Estate Europe report, respondents to the survey see a real estate capital markets crisis turning into an occupier crisis as Europe slides into recession. The UK was seen as particularly vulnerable. Mr Slade concurred: “There are no occupiers. There is no one about. We need occupiers. Until we have occupiers we haven’t got a market.”

Mr Houston continued the gloomy prognosis. “We have a generation of people in the UK who don’t ‘do pain’. Taking the UK and Europe as a whole, there are only 25 percent of the way through the down-cycle. Unfortunately, there will be much more pain along the way.”

Despite the general sense of pessimism, there are also potential opportunities, Mr Elwing said, “If you followed consensus view in the UK a year ago, you would have invested too soon. If you follow the consensus view now, you may miss some early investment opportunities.” The UK was seen to be further down the road to realistic pricing, with values having fallen faster than elsewhere in Europe. Mr Houston commented that the “UK real estate market is more open than anywhere else.”

Stephen Barter, chairman of the Urban Land Institute in London, in his closing comments to the seminar added: “The UK offers property values not seen for over 20 years, and interest rates at levels never seen before. But for investors and occupiers to plan, there needs to be financial stability, and an urgent need for Government, both as policy-maker and now shareholder, to explain the new game plan for bank behaviour and regulation.”

John Forbes, real estate leader in Europe, Middle East and Africa, PricewaterhouseCoopers concluded:

“The sense of gloom at the event was understandable. As our recent Emerging Trends Europe report points out, we are moving from a capital markets crisis to an occupier crisis. It is going to be an extremely challenging year for the industry. What is positive, however, is that we appear to be moving away from hand-wringing about how we got here and instead, focusing on what we need to do to through and out the other side.”

Notes to Editors:

For a copy of Emerging Trends in Europe, please contact Denise Cook on +44 (0)207 212 4952. 


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