With lending at record lows and banks holding an estimated £280bn of debt against commercial property, speakers warned at an event on Wednesday that the property industry will increasingly have to look to innovative solutions to fund regeneration.
Speaking at a MIPIM breakfast summit hosted by the British Property Federation and law firm Addleshaw Goddard, delegates heard that by combining conventional bank lending with vehicles such as tax increment financing (TIF), regional growth funds and enterprise zones, it is possible to unlock private investment in regeneration.
Delegates heard that such an approach was used to create a major new business centre in Corridor Manchester’s redevelopment of the former Royal Eye Hospital.
Liz Peace chief executive of the British Property Federation, said: “Alternative funding is clearly needed to unlock stalled regeneration schemes across the country and generate much needed economic growth.
“As such it’s disappointing that plans for TIF are caught up in the government’s wider plans to reform business rates. Many in the industry feel that the government seems to have lost sight of TIF’s potential to stimulate growth and unlock stalled regeneration projects.”
Paul Conroy, partner and head of social enterprise at Addleshaw Goddard, said: "The need for public and private sector partners to work closely together could not be greater. More than ever before, we need to come together with innovative solutions and new ways of working to help vital regeneration projects get off the ground."