Hi James. How are you? 

 

I'm very well, thank you. 

 

Very good. I've just received your report: 'Delivering World Class Social Infrastructure', which I understand arose from a panel discussion that was held at UK REiiF. Could you provide a brief unpacking of it and indicate what you thought were the key points about this report?

 

Yes. It was a really good panel discussion - we wanted to understand perspectives from the UK market and what was considered to be world-class. Everyone often talks on social infrastructure about trying to be the best, trying to be world-class, trying to have a world-class health service, things like that. You know, world class education too. It's a term that's thrown around quite often and I think it means a different things to different people. So, we thought, well, we'll bring people from the industry together, and we'll try and get those different perspectives, and see where there's alignment, and see where maybe there's completely different views. The report summarizes some of those discussions. It was a fairly big panel as well - we had six participants. We ended up with an all-female panel... 

 

Yes!

...which was really good, but completely by accident, not by design at all. UK REiiF has these really strict rules around diversity on panels and we had absolutely no trouble meeting those this time. Social infrastructure seems to have a nice variety of people working in it, which is great in itself. Things that came out of it were very simple, global points that sound great and easy to do when you write them down, but actually are really difficult to do. One of the main things that we talked about was making better use of the existing public estate, because it ties wonderfully into things like sustainability and the like; reuse what you've got and reuse it to the best of its capabilities, rather than gravitating always towards new build. We make a business out of supporting people in building new buildings, which is fantastic. However, we also accept that reuse of existing estates and repositioning of existing estates is an enormous requirement nowadays and a challenge I think that the industry has increasingly got to grips with. But with time, we'll become even better at it. So, we discussed that at quite a bit of length. And then the other part of the big issue that then subsequently we have raised in things like the report on the health service from Lord Darzi was around investment in social infrastructure - or the lack of. So, there's been a distinct lack of capital investment from the government into social infrastructure for the last few years, both across education and health - and it's the case wider than just the health market. The idea was: can we, and how do we, unlock institutional investment? There is an awful lot of institutional capital waiting to be deployed in assets of this type. However, the ability to do it is a little limited at the moment. So, it's whether there are any examples of where that's been done recently, and it's been done well. Some great examples came forward from the panel. We had Gemma Bourne from Better Society Capital, and she was talking about that on maybe a smaller scale. But then clearly, we had some of the examples being given by the likes of Joe Barnes from Sewell, about how large amounts of capital can be deployed on social infrastructure assets. Beyond that, we talked about how to make sure that housing is there to meet the needs and housing in itself is social infrastructure. So, it was how to make sure that housing is positioned correctly. We do an awful lot of housing work and residential work - it is something that we've got a lot of people who know a lot about it, and it was how that can be fitted to, or best fit social infrastructure that is developed. And then the final one that we came across, really in the discussion was that we don't forget the local side of social infrastructure. So: making sure that what is in place is right for the area. Social infrastructure is very, very dependent on being used locally, and it's very community-specific. That is definitely something that you see in London. You've got to have the right location, and that can be down to a real micro kind of scale, and you've got to have the right facilities for that location, the right services for that location. We talked around that a little bit as well.

 

Just reading through the report, I sketched down a question, which is: where is the money coming from? You know, given the paucity of funds from Central Government currently, what's your expectation there? Are you optimistic about the government unlocking capital on this front?

 

I'm an eternal optimist, certainly in regard to stuff like this - I'd be no good as a commercial property agent! I'm not sure I'd deal with the downturn too well, but I am still optimistic that the government will try and find a way to unlock the private capital that is there and wants to invest in UK social infrastructure. I think that innovative models that will bring together assets that are your more traditional, developed properties and will tie social infrastructure into that are definitely some something that could come forward and will continue to grow. So, you know, regeneration that delivers fantastic social infrastructure is some of the best regeneration that ever happens. I think that really, they have to - there's got to be a way. There's got to be some change to allow developments here. I can't see that the government are going to raise a load of debt and go and build out a load of new hospitals or schools off the back of that and increase debt on the government balance sheet. But I can foresee that they will try and find a way to unlock something, and they have taught extensively in post-election and pre-election, about private investment and unlocking pension fund capital and similar things like that. So, I think all of that conversation hopefully can't be to no avail, with no changes coming down the line. 

 

Now, I was reading up a little bit about Drees & Sommer, because I didn't know that much about you as a firm, and I found some interesting stats. You've got 63 offices, 6000 people, 84 different nationalities and there are 53 different languages spoken across the firm. Presumably, you therefore have a view on London from abroad, as it were. How do you see the city in terms of its perceptions? It's often said that it's the best city in the world - we slap ourselves on the back quite a lot, don't we? How do you feel? How are we viewed as a world city in the social infrastructure context?

 

I am confident that despite Brexit, the European colleagues I have, and their clients, in terms of European investors, developers and the like, still see London as a prime market to operate in, and we see a selection of our clients from the European market, who launch London-based funds and have teams in London, and they've always had those teams in London, and they've retained them, or they've done this as new capital into the market and they want to invest in the UK market. I'm at Expo Real next week, going along with the UK cities and Partners Group, which obviously London is a part of, and just the meetings I've got lined up there with all sorts of developers - hotel developers, care developers, you know, your more traditional kind of residential and the like developers, they are all looking at deploying capital in London, and they're all not base kind of European London firms. They are Europe-wide investment funds and the like. So, there's definitely an appetite. There's still an appetite for London. It is still the key market in the UK for most investors. I would say that that will continue. In terms of our business, I think it was a show of support for that reason, someone wanting to buy the business that and take this leap into the UK market in the way that they have. So, we've got 250 people in the UK, and Drees & Sommer have actually doubled down on that very recently. We've just acquired a business in Northern Ireland called Johnston Houston, so we've merged with Johnson Houston, and they're 25 people. So, it's not just like it was a one off. There's further desire to grow in this market. And you know, long may that continue.

 

Well, that's a good sentiment on which to end. Thank you very much for talking through that report, and good luck in the future. 

 

Alright. Thank you very much.