Paul Bassi: ‘Our ambition should be to be one of Europe’s great cities’

THE chief executive of AIM-listed property group Real Estate Investors (REI) is, in his own intense way, enthusiastically optimistic about the prospects for Birmingham.

“We are really in the early stages of 20-30 year evolution,” said Paul Bassi. “Generally, and I’m speaking about this region, it’s on the cusp of emerging as an economic powerhouse.”

Through REI, he has backed his belief that the region has momentum, with the company having a Midlands-focused portfolio worth more than £150m.

For Birmingham and the wider region to deliver on its promise requires the right ambitions – and having the right people to being those ambitions to life. But Mr Bassi is not convinced the city has either.

“I think our ambition should be to be one of Europe’s great cities,” he said. “I don’t buy the fight to be the second city. I don’t see what value there is in coming second.

“We have all the right ingredients to be a great European city. London is an irrelevance, it’s a unique city. We should be up there with every major city in Europe but be recognised worldwide and our history gives us a head start in that direction.”

Unhappy with the overlap of the region’s inward investment, business support and marketing organisations, he believes there are a “couple of big fixes”, which would see a strong leader become mayor who would then tap into the talent that has previously been put off from getting involved with working with the public sector.

“I still think the leadership here is an issue. We don’t market or promote ourselves to a standard that we need to, but I it is much improved – a lot of good work has been done by Neil Rami.

“The mayoral opportunity is the moment to get the right leader on board. My fear is this will be a political appointment on the strength of the political mood of the moment – that might not necessarily be the right person.

“If we got the right person the talent will come forward and engage and make the difference.”

Mr Bassi has been involved in civic life, having been High Sheriff of the West Midlands and president of Birmingham Chamber of Commerce, but says he knows of a number of people who are prepared to get involved – but haven’t previously – if they knew they would be able to make a difference.

He said: “For too long the quality has gone to the private sector and the also-rans to the public sector. I think there are some very talented people who would gladly contribute and would make a huge difference.

“These are people that haven’t in the last 30-plus years have not engaged with the local authorities. There’s an opportunity, the right person can create that opportunity.”

Spotting opportunities is something Mr Bassi does. He invested £200m during the financial crisis –  although he now says he regrets not spending £500m – and thinks now is the time to strike again.

While the strength of the economy means opportunities are less obvious, he wants REI to be decisive while the EU referendum is causing indecision in others.

He said: “We are very much trying to capture as much of the opportunity as we can at the moment but clearly we aren’t in the same sort of distress as we were in 2008-09.

“We have a three to four-month window, so the opportunity isn’t as big.”

Three weeks ago REI announced pre-tax profits had doubled to £12.2m in 2015 , in a year when the group invested £57.7m on acquisitions.

Already £10.5m has been spent in 2016, which included a deal for West Plaza in West Bromwich (pictured), out of the £70m war chest REI has to support the significant investments that it has identified.

“We have in legals or under offer more than £50m of investments,” he said. “If all the lawyers return from their Easter holidays…”

Mr Bassi says London-based institutional investors has not yet “got the Greater Birmingham and West Midlands in its gun sights yet” but believes they soon will, because Birmingham city centre no longer offers the returns.

He said: “The property market has done well in the last few years when people finished with their London obsession. We have had two strong years of investment in the region.

“But funders, pension houses have put things on hold until the outcome of Brexit. Then I think we will see a bunfight in Q4 assuming a yes vote, and we will see a very good 2017.”

Mr Bassi believes the vote will be to stay in – his view based on the current expectations of bookmakers and on a belief that “the fear of the unknown” will motivate a yes vote – and while he wants to see the UK remain in the EU, it is a different type of fear that is behind it.

“The economic arguments can be made both ways but the one that can’t be ignored is how big a trading partner Europe is,” he said.

“The fragility of global growth doesn’t give you the confidence to go it alone. A no vote could send the UK back into recession.

“But I don’t my decision on the commerciality of all of this. We live in a world of terrorism that we have not known previously. If we are a bit better off or worse off, it’s irrelevant to the security we get from being part of Europe.

“I also think the generation of today – it’s about the next generations – I think it’s important the next generations live in a diversified UK that’s engaged with Europe and the rest of the world.”

Despite the philosophical position, he remains upbeat regardless of the outcome of the June 23 vote.

Mr Bassi said: “We have taken an instinctive and long-term view, just like we did at the bottom of the recession. We belive that the economy here in the Midlands is robust and will move forward regardless of the Brexit decision.”