Moon Executive Search interview Leon Fear for their Board Interview series

In the latest of our series of articles with business leaders, Gemma Wilks, Executive Search Consultant at Moon Executive Search sits down with Leon Fear, Director at Fear Group, to talk about residential and commercial property investment in the South West and what the next investment opportunity looks like.

Bristol’s skyline has changed considerably over the last 10 years. New commercial and residential developments which have expanded living spaces, brought new businesses to the City and contributed to its continued economic success, comments Gemma. But where does the City go next? What does a hot deal look like? And what will support continued growth in Bristol? Thankfully I had an expert on hand to ask.

Leon, to set the scene tell me a little bit about Fear Group.

Founded over 50 years ago, Fear Group are a property investment and development company based in Bristol which operates across the UK and in Europe. Our business is based on research, we track demographic changes, infrastructure and we look at the strategic land opportunities that result from that research.

The opportunity

We are in a period of huge opportunity, particularly in the private rental sector. We have seen a shift in homeownership as not everyone can afford to buy, and the more millennial generation is naturally more transient and therefore does not wish to necessarily buy a property. This is a trend which is going to continue over the next 10 – 20 years. But the expectations around rental properties has also changed – tenants don’t expect to be treated as a second class to home-owners and they expect more from the properties they rent both in terms of tenancy agreements and the standard of rental properties. However, this change is not all one-way, as not only does the security of longer-term tenancies work well for the landlord but higher-end properties can also command higher rents.

It’s all about infrastructure

Infrastructure is one of the key requirements for investment, job creation and housing. We have a distinct lack of good joined up infrastructure within certain areas of the UK, which causes issues such as traffic congestion which in turn leads to pollution, bad air quality and so on. We control a substantial amount of land close to rail networks across the UK and are currently expanding this, as well as in areas where we can see that existing infrastructure be expanded or improved, without the need for major works being carried out.

Investment blockers

Just as good infrastructure is key to investment, bad, or the lack of, infrastructure is the main blocker to that investment. If you are looking to invest in housing or an office building, you need to know that it can be sustainable from an economic perspective. For example, putting £x million into student accommodation is not a good investment unless the project is not only in the right geographical location to attract students, but also has the right infrastructure to allow them easy access to your development.

Economic & political influencers

While the economic and political landscape is changing and no-one can quite understand the full implications of that change, a lot of the fundamentals of the economy in the UK remain sound and we see this as an opportunity to invest in the long-term future. Take our land business, for example, we invest with a 30-year view, from that perspective that it is inevitable there there will be ups and downs in the market. This current period of instability is no different, as if you are investing for the long-term, this as a good time to be investing in the UK.

Bristol focus

Bristol is constrained by the boundaries of other Authorities, and it has a big population crammed into a relatively small area. This means that investment into housing is key – we have a growing population and more people wanting to live in the city centre.

But there are also a lot of areas, within South Bristol for example, that need investment.  People living in these areas feel quite disconnected from the growth that has happened in Bristol in the last few years. Therefore, investment is needed in areas such as South Bristol to connect them back to the wealth and the vibrancy that’s been generated in the centre of Bristol.

The future

We see the private rental housing sector as an area which will continue to expand. In addition, student accommodation is always in demand in Bristol, thanks to the great Universities which continue to attract international students and money into the city.

Expansion could come from allowing taller buildings in certain areas of the city, or development out into the countryside where appropriate and supported by good infrastructure. If you don’t allow the City to continue to expand in one way or another then it stands the risk of prices continuing to rise to a level where they become unaffordable for many people, which is already happening in certain areas. If you don’t go up and you don’t go out – it results in one thing, higher prices!

Ultimately this, together with congestion, will put some people off living in the City, which in turn can have knock on effect on the vibrancy and economics of the City. We want Bristol to remain the great City it is, so my hope is that the developers, investors and council can work together to continue its development in a sustainable manner.

And, the final words from Gemma

Leon, thank you for sharing this interesting insight with me. Bristol is a great City to work and live in, and of course we also have a vested interest in seeing it continue to develop. New housing developments attract new talent to the Bristol market. New commercial developments attract new businesses who support the growth of Bristol’s first-class economic reputation.

As a business, we have been working within the Bristol economy for almost twenty years now, providing search services that are underpinned by our core values which are to be distinctive, ethical and approachable in all our undertakings. So, as we celebrate our twentieth milestone next year, let’s hope the success and vibrancy of our great City continues to be underpinned by effective investment in our capital infrastructure.

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