This update is by economist Chris Worthington, who is a regular PIM speaker.
The subject for this month is area regeneration, the icing on the cake of buy to let (BTL) investments with a good chance of above average returns in the long term.
Regeneration projects are typically on sites that have fallen into disuse because of the decline in traditional manufacturing industries. They are usually mixed use developments including housing, offices, retail and leisure.
Regeneration projects also feature environmental projects, open space and public art, facilities that help to create a pleasant life style for residents.
East London – Olympic Park
One of the best known area regeneration projects is the Olympic Park in East London. This brought together Taylor Wimpy, L and Q, Triathlon Homes, the National Lottery and central and local government to produce almost a million square metres of development including 6780 homes plus office and retail space and a hotel.
When the programme ends in 2031 almost £9 billion will have been spent. In 2010 the BBC broadcast “2012” – a brilliant satire based on the hapless and incompetent people in the project team for the Olympic Park. Fortunately, despite the ridiculous management speak in the programme, the real project is turning out rather well.
In Bristol the largest regeneration project that is currently underway is Temple Quarter, a mixed use development that centres on Temple Meads Station The mayor of Bristol, Marvin Rees commented “this is a once in a generation opportunity to shape a new city quarter. The vision is to create a place that is welcoming to all – to live, work, study, enjoy leisure time and build on Bristol’s strengths as a world class city.”
The University of Bristol is planning to build a new £300 million campus at Temple Meads. The development will transform a seven-acre site next to the railway station into an open campus that will be part of the community, help to regenerate the area and benefit the whole city.
The city council is working closely with its partners, Network Rail and Homes England, to provide investment in infrastructure and new development opportunities to maximise those benefits. A major challenge is an improved, fit for purpose, 21st century station at Temple Meads.
Creating a new transport hub with better connectivity means better social integration with improved access to surrounding neighbourhoods and the city beyond with Temple Meads becoming a true gateway.
Long term view
BTL investors who invest in regeneration areas should be willing to take a long term view, especially with larger regeneration projects with a timescale of decades from inception to completion. However when the project is completed they can be fairly sure that the improved environment and infrastructure will enhance the asset value and boost rents.
BTL investors might also consider the ripple effect outside of the main regeneration area. Two years ago I bought an apartment just outside the Temple Quarter regeneration area. I remain optimistic about that investment.
Our Next Property Meeting
We will all be discussing the latest position on the property market in Bristol and across the UK at our next PIM on Thursday 25 April 2019 at Future Inn, Bristol, BS1 3EN.
We hope you will join us then.
For more info and to reserve your place Click Below