Ronson predicts property upturn in 2014/15

Grant Prior 13 years ago

Development guru Gerald Ronson predicted today that the “sun will start shining” again on the UK property market in 2014/15.

The chief executive of Heron International gave his views on the market following the company’s annual property lunch.

Ronson said the City of London market is already back on its feet thanks to overseas investors and companies looking for better quality space.

But he warned that property professionals outside of central London would need “a large degree of luck, bravery and Alka Seltzer.”

He said: “Historically, I have been concerned that the politicians have not done enough to regenerate outside of London to create jobs and a future for the young people in this country.

“It is interesting to see that in last week’s Budget the Chancellor made a play that this was a priority, but it’s obviously too early to know whether the steps he has taken will make any difference.”

Ronson attacked the banking sector for not being able to “provide the oil necessary to get the development wheels working again.”

He also warned that a mountain of toxic property assets held by the banks are storing up trouble ahead.

Ronson said: “Banks still have a lot of unfinished business of their own and the big question is what happens to the parcels of toxic waste they have tucked away.

“They are sitting on a mountain of distressed assets, most of which they should never have lent money on and could be festering there for some time.

“It is easy to get rid of the quality assets but the banks, especially the Irish ones, will be sitting on some very big losses.”

Ronson hoped that new funding models would fill the void led by Chinese investment and insurance companies setting up property debt vehicles.

He added: “We are now, I believe, a third of the way through the recovery in the cycle with 2014/15 looking like the most likely time for the sun to start shining again.

“The big cloud is not in Central London and the City of London, which remain strong, but what will happen in the provinces.

Ronson was speaking as practical completion of his Heron Tower scheme by Skanska in the City was confirmed and the first tranche of tenants unveiled.

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