Hayley Rees
‘Placemaking’, the new buzzword in regeneration projects, is about making great places to live, visit, work, and enjoy.
Done well, with a proactive council, progressive developer and a supportive long-term investor, placemaking shapes communities and breathes life back in deprived areas. At its core it is about delivering the built environment that residents want, a radical departure from the utilitarian development philosophy of the post-war period, so is a collaborative process between community and urban planners. The concept was first coined in the 1960s in the USA but is now of increasing focus for developers here in the UK with much of the population demanding a greater sense of local community following the pandemic.
Placemaking is often thought to be the reserve of urban planners at local authorities, poring over city maps to find the ideal location for new green spaces. However, the vital role that institutional investors play in creating ‘places' across the UK is often not appreciated.
Institutional investors such as insurers, with long-term pension cashflows to match, are an increasingly visible and influential presence across the gamut of the UK's real estate sector. One example of this kind of investment is build-to-rent (B2R), which is a sector rapidly growing in the UK. JLL, the property consultancy, found that investments of over £100m into B2R projects, a sweet spot for institutional investors, had grown 32% in the first half of 2022 from a year earlier, reaching a total of £2.8 billion. This has led to modern developments appearing all over the UK, driving up environmental and social standards as institutional investors seek to future proof their developments.
In doing so, these developments come to represent far more than just the housing units they provide. They can be the cornerstones that regenerate communities that have been in long-term decline.
For example, as the sole investor in a regeneration lease in the Wirral, Pension Insurance Corporation (PIC) has played a foundational role in the wider regeneration now taking place along the waterfront of the Mersey river, called ‘Wirral Waters'. Regeneration leases are specifically designed to bridge the viability gap in urban regeneration projects, allowing local councils to unlock the benefits of redevelopment, whilst providing guaranteed cashflows to long-term institutional investors. They offer huge benefits for local communities and economies.
Although some areas in Wirral Metropolitan Borough Council (WMBC) are affluent, Birkenhead - where the regeneration project is situated - is an area with one with highest levels of deprivation in the UK, and a commensurate lack of opportunities and jobs. It was once a thriving dockyard and booming economic hub but, through the second half of the 20th Century, the dockyards closed, investment dried up, and by 1993 unemployment in Birkenhead was as high as 35%, and 52% among men. Today, Birkenhead features in the Index of Multiple Deprivation (produced by the government) as one of the 20% most deprived communities in the UK. Corporation Road, which runs right alongside the former dockyard where the project is based, was the 19th most deprived in the country. The two metrics Birkenhead scores most poorly on were income and employment.
Through ongoing engagement with the communities, it became clear to WMBC and Peel L&P, the developer, that restoring the former dockland into an economic and residential hub, a new ‘place' on the bank of the river, would require housing, training and new jobs.
PIC's initial investment is the catalyst for several waterside residential schemes due to be built, creating a new neighbourhood. Wirral Waters as a whole will create 20,000 permanent jobs, and includes new training and educational facilities. At the Wirral Met College, construction students will be engaged for site visits, seminars and apprenticeships, gaining experience on the project and shaping the workforce of the future.
The project also seeks to make significant bio-diversity improvements. Landscaping and tree planting will surround the development, with parks, green spaces, dockside walkways and cycle routes already transforming the waterfront along Northbank.
Through the close partnership between PIC, the long-term investor, Peel L&P, regeneration and development specialists, and Wirral Council, the pension insurance sector is connected intimately with the work to transform the Left Bank of the Mersey to restore Birkenhead's former dockland into a thriving economic and residential hub once again, creating social value across generations.
This is just one example of many across the country. Encouraging private capital investment into infrastructure, such as housing, is vital for the levelling-up agenda. But its impact on people's livelihoods goes far beyond just creating the infrastructure the UK needs. It can breathe new life into communities and create places that people are happy to live, visit, work and enjoy.
Hayley Rees is managing director of Pension Insurance Corporation Capital
