Estates Gazette • 15 February 2025 • Development

Planning capabilities, a lack of grid capacity and funding problems are dampening development.

As the government hunts for new ways to unlock growth across the country, developers point to a series of challenges holding back further and faster delivery of real estate projects.

They’re not the obvious problems. For years, the planning system has been an “easy” pick on which to blame slow progress, said Caroline Baker, regional managing partner at Cushman & Wakefield, speaking at the agency’s (Re) Vision event in Manchester.

Tim Heatley, co-founder at Capital & Centric, speaking on the same panel, said it is schemes and staff – not the system – that causes the headaches.

“We always say if you propose a good scheme, then it’s going to get planning,” he said. “When we find developers are arguing with planners, it’s because the scheme is crap.

“If we have challenges it’s not planning, it’s the planners’ incompetence or they’re just too busy. When I hear that the government want to invest in planners, I fear that we are going to have more people who want to regulate the designs – but that’s the delivery bit that the public sector is challenged and struggling with massively. There’s a wider ecosystem issue.”

Bruce Poizer, partner for capital markets at Cushman & Wakefield, added: “We are hearing some feedback that the gateway process [of the Building Safety Act] alone is problematic. It’s supposed to take 12 weeks, and in many cases it seems to be taking a lot longer than that and adds additional stresses at that moment in time when developers are trying to achieve funding.

“There’s a good reason for having regulations, but there is potentially some scope to streamline this.”

Real estate players urged councils to appreciate their role in unlocking growth by partnering on proposed transformations.

Capital & Centric is masterplanning a £3bn town in Cambridgeshire. Alongside Homes England and developers Keepmoat and Town, the regeneration specialist is working with the newly formed Northstowe Town Council to deliver 10,000 homes and a town centre with up to 538,195 sq ft of commercial floorspace over the next 30 years.

“We’re trying to take key components [from cities such as London and Manchester] and apply them to other places, and think about what those cities offer and what the towns don’t offer,” Heatley said.

“It’s a challenging market. We’re trying to pioneer and find a way to stack up something that doesn’t stack up. We can’t do that in isolation. We need a collaborative effort, a team effort.

“The public sector holds the ability to help. They have land and buildings they can contribute into an affordable package that they can put in at minimal or low value. Also, they can loan funds more cost-effectively than we can. That combination is vital to unlock new markets and challenging places where we’re trying to pioneer and create the flow of other investment on the back of what we do.”

Kate Howe, director at Tritax Big Box Developments, added: “Working with local authorities and also with the central government is essential to any part of the real estate sector. While we don’t collaborate with the public sector in that regeneration arena, those relationships are equally important.

“Logistics and industrial is essential infrastructure, the economic backbone of the UK. You can’t build houses if you don’t have freight terminals and good infrastructure to store and move goods around the country.”

Issues around energy supply have added further pressures to the delivery of projects in the sector.

“Energy is going to continue to be a challenge across the UK for a long time to come, and having some innovation around that is certainly going to be required,” said Tritax’s Howe. “It would be really good if we saw a government come forward and commit to very significant infrastructure investments with timescales and obligations.”

In the meantime, some sector players have started to explore options in response to the lack of energy infrastructure to allow development to happen. This includes delivery of energy centres within industrial schemes that have a more sustainable power provision.

Peel NRE, part of Peel L&P, has developed an energy and resource hub near Ellesmere Port in Cheshire. The project, known as Protos, was expanded to include a recycling facility and a hydrogen refuelling station.

Howe said: “We would probably like to see a little bit more cognisance in the Labour government around the importance of what we do. The National Planning Policy Framework is the first time that the logistics sector has been specifically mentioned as a key import to the UK, and we’re really pleased to see that. It’s also come hand in hand with the emergence of data centres, the first time that has been mentioned from a planning perspective, and that has taken 15 years to get to where it is now. Imagine where we would be now if we had that input 15 years ago into the industrial logistics sector.”

According to Cushman & Wakefield, an inflexion point was hit in the third quarter of last year in almost all markets, thanks to the then-new government, inflation coming under control, interest rate changes and signs of growth in the economy.

“If you look at the quarterly position, it seemed there was a crossover point where all sectors were actually seeing positive growth or at least no negative movement for the first time in almost two years and that felt like a moment in time when I thought, ‘This is great going forward’,” said Poizer. “Property is cheap, returns moved significantly across many sectors and there was a lot of money out there to spend.

“There’s obviously a lot of things going on from a geopolitical perspective but throughout that it’s worth bearing in mind that the UK property market is extremely mature, very transparent and has a major attraction for foreign capital.”

Poizer added: “The government has already begun to take action in the last few weeks, in terms of making sure that development can take place. I’m awaiting further developments on that front.”