Given the substantial attention dedicated to a market update at our recent Annual Meeting, we thought that rather than a letter about the market, it would be more interesting to put together a one-off discussion piece focused on the U.K. planning system.
It has occurred to us that planning risk can act as a blind spot for some investors who are not as familiar with the U.K. system. When these investors use heuristics from other markets or work with a partial understanding of U.K. idiosyncrasies only, they risk investing in projects where the risk profile is misunderstood and inappropriately priced. They may also avoid areas that present a considerable opportunity due to greater planning-related supply constraints than would have otherwise been assumed. Therefore, it is a useful exercise to run through a brief summary of the U.K. planning system and identify some areas where pitfalls and opportunities are created. For those of you who would like a more market- focused update, we will follow on with one of these in the near future and are available for direct discussion in the interim.