Since the financial crash of 2008 a notable feature of the property market in the UK has been developer appetite for new development and regeneration schemes in towns and cities up and down the country. Some of these schemes have been very substantial indeed – of a magnitude perhaps not seen for decades – with the potential to have a considerable impact on their respective locations. In this report, and in the light of Covid-19, we will take in some thoughts from an assortment of developers regarding what impact the pandemic might be having on their plans and also on their appetite for future developments going forward.
Starting in London, Yoo Capital Management is a privately-held partnership that specialises in transforming underperforming assets and companies into institutional-quality core investments. Yoo Capital Management has invested in $2.0bn of assets under management representing over 2.7m sq ft of development across Greater London and encompassing retail, leisure, commercial and residential. In 2018, the business announced a £1bn plan to transform the iconic Olympia London exhibition centre into a new creative arts, entertainment and exhibition district.
Lloyd Lee, managing partner at Yoo Capital, says: “The current situation is very serious, first and foremost in human and health terms. It will also have a significant economic impact, but the long term fallout is yet to be fully realised. However, history gives us indicators that the downturn will eventually become a period of recovery.
“When it comes to real estate, location and supply-demand fundamentals are constants. We focus on investing in good locations, of which Olympia is a great example. On top of that, the supply-demand fundamentals in London remain very well balanced. Finally, we are value investors who are committed to value creation through intrinsic improvements to real estate, not through volatility trading.”
Lee reminds us that all major development projects involve uncertainty to some degree but that the company is maintaining a positive approach and its plans for the redevelopment of Olympia remain on track. He says: “We are lucky enough to be working with some of the most talented, committed and financially stable partners in the world who are working alongside us to bring the Olympia masterplan vision to life in 2024, as originally scheduled.
“There is no predicting the future and what new challenges may be ahead. What we do know is that the intensity of focus, commitment and resources today are working well in this extraordinary environment and the drive to successfully deliver has continued without pause, which is testament to the entire team working on this development.”