Landmark £4 billion deal was one year in making

Andy Street said the region's £4 billion investment deal with Legal & General, formally announced today at the UKREiiF property show, would drive economic growth in the West Midlands over the next seven years.

Speaking to the Express & Star at the new L&G-funded Good-Yards development in Birmingham's Jewellery Quarter, the Mayor revealed that the seeds of the deal were sewn in the hours after he had been reelected in May 2021.

At that time the region's target of building 16,000 homes a year had been hit by 15 months worth of Covid lockdowns, putting a serious dent in the progress made over the previous two years.

With the Mayor having campaigned on a pledge to hit a target of 215,000 homes by 2031, bringing in a major private investor was seen as the best option to get things back on track.

And in L&G – the UK's biggest investor with a portfolio of £1.4 trillion – Mr Street said the West Midlands Combined Authority (WMCA) found a willing partner.

He recalls that "positive" initial conversations took place in the days following his election victory.

He says both parties were immediately "keen to strike a deal", and the "political will" in the region coupled with a "dynamism" from institutions such as universities and investment companies helped to sell the West Midlands to L&G.

Then WMCA's 2022 investment prospectus, unveiled earlier this year at the MIPIM event in Cannes, helped push the deal over the line, Mr Street said.

"When we put the prospectus together, L&G could really see the scale and substance of our ambition," he added.

"I think that did help hook them, so everyone who was over there at MIPIM, maybe they played a role in this."

Mr Street said he was confident the deal's first development, for 234 homes in Oldbury, will lead to "many, many more schemes of different types" in the years ahead.

He said an important element of the agreement was a "homes for all" approach, with at least 20 per cent of the properties in each development classed as 'affordable'.

Meanwhile a focus on brownfield development would help protect the green belt, an issue that has rocketed in importance since the publication of the controversial Black Country Plan last year.

"I firmly believe we can achieve the majority of our vast target of 215,000 homes on brownfield sites," Mr Street said.

"It's good for the green belt, good for sustainability and it's good for bringing communities back to life.

"If you look at the derelict sites we have got, it helps everyone in those communities if we can put new homes on there. I'm sure that will be one of the areas that benefits from this investment."

According to Councillor Mike Bird, the WMCA's housing chief and leader of Walsall Council, the partnership with L&G will play a key role in helping the region's economy bounce back after Covid.

He said it showed that investments in infrastructure made during the pandemic had given the private sector confidence in the combined authority.

"This partnership brings together public and private sector investment and skills on an unprecedented scale in the West Midlands," he said.

"It also shows how our determination to press on and continue making key investments throughout the pandemic, bringing solid delivery on the ground, has been critical in driving private sector confidence and trust.

"The level of investment that L&G has set out will be an incredible shot in the arm for the West Midlands as we continue our recovery, helping to bring sustainable economic growth that benefits all our communities and supports our ambition to be a net zero region by 2041."

Bosses at L&G said the firm has financed more than £30bn of regeneration in UK towns and cities outside London. They said the deal had been made possible by "devolution and determination" and vowed to help the West Midlands "level up".

L&G’s director of levelling up, John Godfrey, said: "Towns, cities and regions across the UK can do much, much better – this is the essence of the levelling up agenda.

"This framework agreement with the West Midlands enables political will to combine with financial resource so policy intentions become deliverable realities.

"We fully expect this to be an exemplar of what can be achieved with the right mix of devolution and determination."

L&G has previously invested more than £2bn in the WMCA region, including the £210m Birmingham Health Innovation Campus and a number of housing developments.