I'm in Glasgow this morning, having flown up from Heathrow. I find that flights are always a good opportunity to reflect on some of the wider issues that are driving the general economy and real estate markets.
As I am presenting my IPF short paper on real estate debt at lunchtime, this morning my thoughts drifted to the fact that occupier demand remains a key driver of real estate values.
One of the important factors in that occupier demand is infrastructure, and more specifically transport. The evidence of demand for (and the increasing value of) commercial and residential property close to Crossrail stations is a clear manifestation of that.
The comparison between King's Cross and Gare de Nord Stations provides another example of the benefit of investment in first class facilities. The same applies at Heathrow T5 and the new T2.
The Centre for Cities published research earlier this week which highlighted the continuing North / South divide in terms of new investment and jobs.
That divide is a problem for everyone in the UK because capacity in London and the South East is limited and therefore without a stronger North, new jobs and investment will inevitably drift towards the continent and away from the UK.
In my mind that means that HS2 is certain to provide a catalyst for investment (if it goes ahead) and the important question is not if it is necessary (it is) but how it can be delivered at a sensible economic and social cost.
That is a question which will never be able to be answered definitively (at least in advance) but I do have a few thoughts on that so, watch this space for my follow up piece - "Does London need the Houses of Parliament?"