Real estate, alternative real assets and other diversions

Prop. Notes: Our Proprietor ruminates on Enoch Powell vs Roy Jenkins vs Tony Benn, negative interest rates and the crassness of BA

Prop. Notes

Back in sticky, sweaty July, discussion over lunch turned to techniques for getting back to sleep at 4am. I confessed that my trick is to watch old political footage on YouTube, including conferences and US Presidential speeches. 

Worse still, and saddest of the sad, I even watch Vice Presidential debates.

Even if you are not a tragic, political anorak, I highly recommend two absolute British classics. First, Enoch Powell and Roy Jenkins discussing the correct policy response to inflation in a 1970, black-and-white, Thames television episode of This Week. The level and sophistication of the debate is startling as the two of them argue, on prime-time commercial television, about monetary theory and whether incomes policy can ever be a weapon against inflation. Powell is the parchment-dry theologian, arguing from first principles that inflation is a disease of money and thus can only be defeated by monetary means. Jenkins, no less intellectually confident and clear, is more the Anglican Archbishop, accepting some of Powell’s arguments while stressing the need to come up with a range of practical, politically feasible policies.

Then, for those not completely bored senseless by Brexit, a second clip. This time, a 1975 masterclass from Jenkins and Tony Benn on the arguments for and against UK membership of the then EEC. In this Panorama, two of Harold Wilson’s Cabinet Ministers go head-to-head, with simmering personal animosity, during our nation’s first referendum on the subject. Eight million people watched this joust and I have never seen, or heard, arguments for each side delivered with greater clarity or conviction.

However, the first clip, of Powell vs Jenkins in 1970, is my favourite. This is mostly because everyone, including presenter Robert Kee, seems to be wearing the same NHS spectacle style frames, and that all the working-class men are wearing cloth caps and ties. Equally, there’s a great contrast between the frightfully posh interviewer and the voices in the London market.


Going into the autumnal months, the dominant investment theme is the continuing decline of bond yields. In this edition, we have brought together some brilliant, polemic minds to address the issue. In our ‘Quarterly Interview’, Alexander Chartres, of Ruffer, is clear that global bonds, government and corporate, are the wrong price. Bill Blain agrees, and thinks the market is set up to cause maximum pain to a large number of investors who have been sucked in. Next, Peter Warburton forensically analyses what lies behind the negative yield trend and ultimately worries about a palace revolution at the Fed. Finally, Gavriel Merkado links the bond yield decline to the current fashion in real estate investing, arguing that too many have piled into high-yielding RE assets while underestimating their risk and liquidity.

In the midst of this issue and global asset price inflation, perhaps some famous UK REITs, trading at huge discounts to NAV, are starting to look vulnerable to hostile takeover. In our ‘Guest Essay’, Peter Bill wonders whether US/Canadian capital might soon bid for either British Land and/or Landsec. However, if those global big boys are reading The Property Chronicle, as they should be, then they will want to wait a bit longer, as Alan Carter is sure retail asset values and rents have much further to fall.


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About Stephen Yorke

Stephen Yorke

After Cambridge University and a few years at the Commercial/Chancery Bar, Stephen spent two years in John Major’s Political Office at Number 10. He then laboured on the FX/ Bond trading floors of two investment banks during the 1990s. In 2004 he founded (and ran until this year) a small Real estate Fund management company. In 2017 he founded 'The Property Chronicle' and is now a new boy publisher.

Articles by Stephen Yorke

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