For this year’s UKREiiF conference, 7,500 professionals descended on Leeds' Royal Armouries Museum and a cluster of white tarpaulin pavilions. Agents, developers, investors and council leaders gathered to discuss the issues facing the industry which, more often than not, included government policy and the move to net zero.

It was the minister for investment Lord Dominic Johnson who fired the starting pistol at the event, now in its third iteration, delivering an enthusiastic speech on the importance of the property sector in providing the necessary infrastructure to grow a UK economy recovering from multiple hits.

Lord Johnson, a global emerging markets investor just six months ago, spoke specifically about the “renaissance of the British regional capital”, highlighting the strength and appeal of the UK's regional urban hubs to foreign investors.

Of course the sector will need help from the Government to deliver the buildings and places of the future. Lord Johnson recognised this and vowed to help developers and cities by fixing the planning system, as he reiterated chancellor Jeremy Hunt's ambition for the UK to become a science and technology “superpower”.

Lord Johnson said: “We are extremely keen to make sure that the planning system works; it works for you, and it works for the citizens of this country. If we get that balance right, we will see a huge further wave of investment coming into this country.

“I call upon you for a true partnership, for the government and the private sector, and the civic leadership to work together to ensure that we have the right regulatory framework, the right designs and the right level of international partnership.”

The minister was confronting the frustrations around the planning system head-on, with property investors and economists warning just a week before that the country's “sclerotic” planning system was slowing development opportunities and the wider economy, as well as hindering the trade from reacting to market trends.

He described the government’s levelling up mission as being at "the core" of the revival of the regional cities. Council representatives in attendance at UKREiiF had a different opinion as they suggested ways its funding mechanism could be improved.

The London Councils chair Georgia Gould said the levelling up fund, through which areas access money for development and infrastructure projects, involves “too much pitting places against each other” and wasted opportunities to work together.

Meanwhile, Labour Mayor of West Yorkshire Tracy Brabin labelled the competitive bidding a “beauty contest” and a waste of time and money for councils. Her comments came after a Local Government Association paper recommended earlier this year that the mechanism should be replaced in favour of an “evidence of need” model to make the most of the billions of pounds of funding.

Brabin said: “Bradford spent hundreds of thousands in their last bid for Odsal Stadium, Leeds had six bids that weren’t successful. That time and effort is actually a waste of money. And then, on the flip side, Halifax for example got money for a leisure centre, and because of inflation they couldn’t deliver it.”

One of those councils, Bradford, signed a pre-development agreement with the English Cities Fund, a joint venture between Morgan Sindall subsidiary Muse, Legal & General and Homes England at UKREiiF.

The £24 million project involves the creation of 1,000 homes as part of the council’s City Village plans, serving as another example of the private and public sectors combining to regenerate sections of regional towns and cities; something which was a common theme all conference.

Speaking at a session on “unlocking the right investment” for sustained levelling up, Scottish National Party Glasgow Council leader Councillor Susan Aitken told delegates that partnerships between the public and private sector were developing well in her area, helping the city to move forward from its industrial past.

Aitken said: “We are actively seeking ways of working with investors and building collaborations that tackle all of [our] challenges, understanding that those collaborations bring the public and private sector together and that we understand as the public sector, that the private sector is also capable and, indeed, does care about place and people.

“I hope the private sector understands that we, as the public sector, are capable of effective delivery and impact, so we can come together in genuine collaboration and tick all of the complex boxes that we are trying to deliver.”

Birmingham City Council chief executive Deborah Cadman, who was at the same afternoon session on Tuesday, echoed Aitken, saying it was important that councils found the right private partners to help regional cities to grow.

She cited the joint venture between Birmingham City Council and Lendlease to regenerate Smithfield Birmingham. The masterplan for the 42-acre development, submitted earlier this year in January, includes a workspace campus of more than one million square feet and 600 sustainable homes during the first phase of the development.

Before UKREiiF, Birmingham teased its plans to become one of the UK's greenest cities via its 'Our Future City: Central Birmingham Framework 2040', a strategy that will help the city to build up to 35,000 energy efficient homes and 200 kilometres of “active travel routes”.

Cadman said: “In Birmingham, we are [developing] in a different, exciting and sustained way with Lendlease, who have committed to work with us for, ultimately, what is a generation, but not just building stuff, but working with us to invest in communities around it as well.

“Those conversations and delivery are the type we need to see in our cities. It’s not one and done, it’s not about making a profit and leaving, it’s totally different, and we have been very clear about that expectation with the people who want to invest in our city.”

Ways to secure investment into regional cities was a strong theme during the entire conference, as the UK works towards spreading opportunity and levelling up, with civic representatives sharing their development opportunities across all sectors.

But how is the UK investment market faring as it continues to shrug off the effects of COVID and battles strong headwinds? JLL's head of UK capital markets Oliver Paine told CoStar News the market was in somewhat of a lull, which was reflected by a lack of deals during the conference. He said: "The market, as we all know, is very subdued, and that's not because of investor appetite but bluntly because, why would you sell now unless you need to?

"In most sectors, you're not going to get top dollar at the moment... and all the rates have gone up and, therefore, getting someone to pay best yields or where they were 18 months ago is very difficult. There are dribs and drabs that are being sold, some funds getting rid of a few pieces, probably to increase their cash position but also because they are assets that don't sit well in their portfolio."

He suggested a drop in interest rates could help to kick life into the market, where buyers and sellers are too far apart. "We're in danger of talking the market down. There are pockets for the right asset, where you do get competition on the pricing, but it's fairly few and far between... We're just waiting, everyone is waiting."

Perhaps one of the biggest pieces of news from this year’s UKREiiF was also delivered on the first day, as Homes England outlined a £16 billion strategy to deliver more "good quality, affordable homes”. It called the five-year plan "both a call to arms and an offer" to the entire housing and regeneration sector.

Chair of Homes England, Peter Freeman, said in a statement: “This is a pivotal moment for Homes England as we reaffirm our role as the Government’s housing and regeneration agency and go even further in helping to create the thriving places of the future."

The subject of the UK’s housing crisis and how to combat it was brought up at the beginning of the second day.

Former Conservative prime ministerial hopeful Rory Stewart and Tony Blair’s ex-head of strategy and communications Alastair Campbell handled a hot-ticket debate on housing and asked experts how the government should tackle it.

Robert Evans, partner at UK property developer Related Argent, said: “Government is able to sign off things on a longer-term basis, certain infrastructure, HS2, nuclear defence, nuclear power and so on, but it hasn’t managed it in housing.

“That is because housing is so political, no government feels like it can bind the hands of future administrations. But we need a long-term infrastructure-type of approach to housing, and we need more funding to be allocated and then not to be micro-managed and controlled by Whitehall.” He added: “It is not the way we do most things, but the current system doesn’t work, so let’s change it.”

Evans’ words echoed that of housebuilder Berkeley Group’s chief executive Rob Perrins who, a day earlier, had called for the government to focus on a longer term housing strategy that provided certainty for the property sector that would be building these homes. “Central Government have to set what are their aspirations and set up appropriate policy for that. Currently, if that is 300,000 homes, then they need to set policy to deliver that,” Perrins said.

Having worked as a minister under prime ministers David Cameron and Theresa May, Stewart told the audience that housing had been a priority of numerous leaders but suggested that governments risked putting off some voters if they got serious on plans.

“Every single prime minister I worked under talked endlessly about housing. They were perpetually emphasising in every internal polling that we did, that housing was going to be the key towards a Conservative victory.

“As we have discovered again and again, every time the government really tried to push ahead, there was a massive backlash from citizens. At some level, we have never been able to overcome the fact that a lot of our voters do not want these houses built, while another lot of voters do want houses built.”

The very morning of that session, Labour leader Keir Starmer had attempted to crank up pressure on the Government by pledging more green belt homes.

In a series of interviews, Starmer said his administration would give councils and residents more power to build on green belt land to meet local need while the Government has committed to protecting such land.

Select Property director Giles Beswick told CoStar News the Labour leader’s pledge to unlock greenbelt land for homes would not affect the work of the residential developer, which works primarily in urban Manchester. Nevertheless, he said the residential market was in a “pretty good” condition, with strong demand for built-to-rent accommodation that he said had room to grow.

He shared that the group had sold around 300 out of the 477 BTR homes at its One Port Street development, a 33-storey residential tower in Manchester’s Northern Quarter. The development, costing a reported £154 million, is still under construction and scheduled to complete at the end of 2025.

Beswick said: “That is a pretty good run rate [which] is underpinned by very strong tenant demand. A lot of residential property in Manchester is more or less fully occupied. Our model is very tenant-focused, so we have a lot of amenity in our building, it is very service lead, with young professionals living in our buildings.”

He added that strong tenant demand for BTR was helping to underpin strong investor demand, with the balance between supply and demand in key regional cities “a long way from being addressed”. The group is, however, keeping an eye on interest rates and how that affects the market, with the Bank of England raising rates by another 25 basis points to 4.5% last week, their highest in 15 years.

“We are pretty optimistic about the market. The challenges for us are more on the supply side, so finding sites, unlocking planning and funding them, because, obviously, high interest rates don’t help with the cost of debt. And, although we are selling off plan, we do need some debt in the front end and the back end to deliver them.”

Away from the housing sector, there was big news on the UK industrial scene on day two of UKREiiF as the West Midlands Combined Authority appointed Segro as its strategic partner, and committed to invest £2 billion over the next decade.

The duo said Segro is planning to build 13.5 million square feet of sustainable warehouses across the region by the end of 2033, focused on tech-enabled logistics facilities as well as purpose-built space for research and development and light manufacturing.

One of the afternoon sessions on the second day centred around industrial and how the UK market was looking to develop towards net zero targets. Melanie Leech, the chief executive of the British Property Federation, told delegates that industrial real estate often felt “under-loved”.

But Leech told delegates the sector was leading the way in green innovation, largely due to the vast amount of space developments had to test out technologies, such as solar panels, helping occupiers reduce energy costs in times of higher inflation. This was in addition to the social value it adds to communities.

She said: “It’s a growing sector because the different ways we want to live our lives is changing and as we do that, we need more and more logistics to support that. It’s innovating fast, it’s providing higher skilled jobs. There is a very traditional, old-fashioned image of what a warehouse might look like. Nothing could be further from the truth. It is supporting 3.8 million jobs across the country and contributing £232 billion to the economy."

The importance of industry being able to provide employment for UK regions was made more relevant during UKREiiF as the media reported Vodafone was planning to make 11,000 job cuts across the world. Telecoms giant BT has also said it plans to cut some 55,000 roles.

Paul Weston, regional head of Prologis UK, said the industrial sector would help to provide jobs of the future to ensure developments benefited the communities they inhabit. Speaking exclusively to CoStar News, Weston reflected on the market.

“We had this period during COVID where, for clients like Sainsbury’s, they were saying it was like Christmas everyday and that wasn’t in a good way. [They were] asking how they were going to manage this. We had that huge spike in online retail and every building, wherever it was, was being taken and industrial, in terms of pricing, the yields were coming into 3 to 3.5% for prime and rents were growing. We’ve never really been in a market like that ever.

“What’s been interesting is that, as we have got back to reality, looking at how things have really changed. You have seen [the proportion of] internet shopping having gone for 35% back down to about 26% or 27%. But it was 19% in 2019. So, you have seen an exponential growth. That side of things I expect to see keep on going."

He added: “We are probably seeing more secondhand space coming back. There has been a wave of new construction that was started just before things really wobbled last summer. We are seeing that spec supply come on now. But quite a bit of that is leasing up, before, at or around completion. That new space will wait until there’s another wave.”

Melanie Leech was playing chair again at what she called “survivor's camp”, the final day of the conference. Leech was joined by developers, investors and government agencies who sat down to discuss some of the pressures and challenges of the market, as well as looking at the opportunities in the year ahead.

Jonathan Bayfield, head of UK real estate research, real assets, Aviva Investors said: “Bank of England rates are at the highest level in 14 years, core inflation seems to be pretty sticky at the moment with the BoE saying that we are in a wage pressure cycle, which is all rather difficult for us and, to be honest, we’re not going to be turning round back to cheap money, low interest rates any time soon.”

But he did offer a glimmer of hope, saying that UK properties would appeal to foreign investors due to“big declines” in capital values and the UK's rapid price correction. “From an international client point of view, lots of people are calling us up and saying the UK is screening good value, relatively, across the globe from a real assets perspective,” he added.

One of those markets to be hit by falling capital values is offices. MEPC’s head of development Paul Pavia confirmed in the same session the ‘flight to quality’ phenomenon being seen in the office market, saying the challenge for those offices was dealing with “less popular” buildings as he warned they could become "monuments of unuse".

Bayfield acknowledged a “very challenged sector”, saying that people were tending to invest alongside thematic trends, one of them being lab space and life sciences. In a separate session, JLL’s head of life sciences Chris Walters said the market was now “standing on its own feet”.

“It’s been interesting to what how the real estate investor community has looked at the life sciences sector over the last 24 to 36 months. There is no doubt that COVID raised it up in terms of profile, but it has now evolved and come out of the alternative asset class.

“We are seeing more investors committing to life sciences thematically as a place where they want to put capital… it’s great to know that there are strong sources of capital from high network private equity to sovereign wealth all looking to get into the sector. So, I think it has a huge part to play”.

On the third day, Labour shadow chancellor Rachel Reeves joined Leeds City Council chief executive Tom Riordan to discuss policy, place and people.

Riordan caught up with CoStar News after the event, saying it had been “brilliant” for the city, with more delegates and senior leaders than last year. He said: “The city is our stand and the people have absolutely given us 100% positive feedback about the city and how they’ve seen so much change, positively, since they were last here.

He added: “I will always remember an investor saying to me, I won’t invest in somewhere until I know the story of a place, and I think, although people knew about us and thought we were doing well… I think people now know our story better.”

CoStar is a media sponsor of UKREiiF.