Property chiefs have insisted a reform of the planning system and an increase in bank lending is vital for commercial development to continue its recovery through 2011.
Speaking at a British Property Federation event during the Mipim property conference in Cannes this week, British Land chief executive Chris Grigg said planning restrictions were limiting development, particularly on regional out-of-town retail projects.
“If we look beyond London, planning restrictions are certainly limiting development, particularly in out-of-town retail, but extension and repositioning are still providing opportunities,” said Mr Grigg.
He added: “The key question for all property companies, while banks remain cautious over lending, is whether or not they have the balance sheet strength to commit to development projects.
“Many financially strong property companies have already committed to significant development programmes.”
The UK planning environment was heavily criticised at Mipim, and held up as one of the primary barriers to development in the UK. When asked about the UK planning system, architect Sir Terry Farrell said: “We don’t have planning in the UK, it’s just development control.”
BPF chief executive Liz Peace called for communities to be given the right incentives to accept development within a planning system focused on economic growth.
“While lending to the property industry remains constrained it is vital that developers and local authorities are freed to find innovative solutions to promote growth,” she said.
“For these partnerships to take hold, councils must be given the right tools to create the physical and social infrastructure needed to unlock development - whether through new funding tools or the greater localisation of business rates.”
Since the publicly funded bail-outs, banks have been condemned for their continued reluctance to lend for development.
However, vice-president of Barclays Real Estate’s Emea division Steve Sprigens said development finance was still available.
“While the market is experiencing challenging conditions, Barclays Real Estate still views property as a robust and sustainable asset class with significant opportunities for growth under the right management,” he said.
“We continue to build long-term relationships with experienced real estate professionals across a broad base of products and all sectors of the real estate market.”
Elsewhere at Mipim, mayor of London Boris Johnson announced that the first legacy housebuilding contract on the Olympic Park would go to the market next month.
Developers will be able to bid in April to build 800 homes between the VeloPark and the Athletes’ Village in the north-east of the park.
The development will be a mixture of flats, mews houses and town houses with 60 per cent providing family houses.
Work will start on site in 2013, with the neighbourhood centred around 3,000 sq m of community and ancillary facilities including a polyclinic, two nurseries and a community centre.