The Power of Place: Unlocking the Triple-Dividend for Investors, Cities and Citizens
As quality places increasingly create high value returns for investors and city regions, we challenge whether the ‘place dividend’ is paying out for local communities and individual citizens.
Growth of Place Based Investment
The growth of place-based (impact) investing has moved from the periphery of social finance to a multi-billion-pound pillar of the UK investment landscape, with early adopters like City Funds LP (Better Society Capital and Bristol City Council) and the Greater Manchester Pension Fund pioneering the local investment model. The announcement of the 2025 Mansion House Accord has crystalised this shift in the British investment landscape.
While the Mansion House Accord set the target – allocating 10% of default funds to private markets, with a 5% “home bias”, the Sterling 20 will act as its powerful delivery vehicle. This partnership of 20 of Britain’s largest insurers and pension providers (including major players like L&G, Aviva, and Phoenix Group) is a clear commitment to a place-based impact model. We can already see this in action, with L&G committing £2bn specifically to regional housing and urban regeneration, targeting 10,000 social and affordable homes and 24,000 jobs by 2030 [1]. More widely, Sterling 20 is expected to unlock at least £25 billion for UK-based housing, infrastructure, and high growth industries and kick-start a “crowding in’ effect through de-risking regional UK projects to catalyse further private capital investment.
Similarly, the LGPS sector in England and Wales is playing a unique role in supporting the economic development of local communities and places. Under the Fit for Future reforms (effective April 1, 2026) all Administering Authorities are to delegate the implementation of their investment strategy to one of six “megafund” pools, alongside boosting investment in local areas and regions, with an ambition for up to 5% of assets for local projects[2]. Alongside this, the UK Government recently launched the Office for the Impact Economy in November last year, with a mission to boost the UK’s impact economy. The Office is committed to place-based initiatives, working collaboratively with stakeholders to enable place-based social and financial innovation to flourish at scale. Evidently, the commitment to a place-based approach to investment in the UK is clear, both publicly and privately, but also across (inter)national, regional, and local stakeholders.
Place Based Investment Creates Value for the Investor
Place is an increasingly important determinant of successful investment. Place selection is becoming a core component of investment strategies, with investors seeing strong returns from investment in cities with strong democratic leadership, deep and liquid capital markets, diverse employment bases, enabling infrastructure such as transport connectivity, and vibrancy and culture. Coupled with a pipeline shift towards long-term capital, patient investors are generating significant returns from increasingly popular asset classes, with the Urban Partners, C40 Cities and Arup’s Unlocking Sustainable Urban Regeneration in Europe report making the case for brownfield regeneration as an investable asset class, with a £4 trillion investment opportunity across Europe.
Central to this pipeline shift is the opportunity for residential investment, with the ULI and PWC Emerging Trends in Real Estate 2026 report highlighting that 5 out of the top 10 sectors to watch across Europe are living sectors, including student housing, serviced apartments, retirement/assisted living, co-living and affordable housing. The Greater Manchester Good Growth Fund, a landmark £1 billion investment vehicle launched in late 2025[3], is a flagship example of this focus. The Fund is seeking to supercharge the region’s place-based investment portfolio, with an integrated pipeline of housing, intended to de-risk entry for private investment. It has launched initial funding for nearly 3,000 homes across a diverse tenure base, including “genuinely affordable” housing. In return for its affordable housing investment, the Fund can expect to see resilient yields, spurred by government-backed income (with a significant portion of rent in this sector underpinned by the benefits system) and long-term predictability via the government’s 10-year rent settlement (April 2026-March 2036).
Place Based Investment Creates Value for the City
Following mayoral elections in May 2026, 77% of England will be under some form of devolutionary power, giving our regions the teeth to lead. Now more than ever, City leaders are central to creating sophisticated and attractive investment prospectuses acting as a key partner in pipeline creation. Mayors in regions like Greater Manchester and the West Midlands are already working with the Treasury, the Office for Investment and Sterling 20 to co-design investable pipelines that meet specific regulatory and fiduciary needs. These pipelines will be essential in attracting agglomerated private and public investment across co-located asset classes including transport, healthcare, residential, and commercially-led development. For example, the Atom Valley Northern Gateway Mayoral Development Corporation is already working to align public and private investment to accelerate development of c. 17 million sq ft of employment space and 7,000 net zero homes. Similarly, Northern Powerhouse Rail (backed by a £45 billion long-term funding envelope from Central Government and necessarily supported by local contributions from the North’s Mayoral Combined Authorities and private capital), will unlock transformation across the North, including turbo-charging Manchester Airport Group’s £1.3bn transformation of Manchester airport (Chris Woodroofe, MD of MAG).
It is this scale of joined up investment that is creating a virtuous circle of growth in cities and regions like Greater Manchester. Stacked public sector investment (in part enabled through the Greater Manchester Combined Authority Integrated Settlement) and private sector investment is enabling developments like Victoria North to not only deliver new homes, but also unlock expansion in the Bee Network and the construction of a new healthcare campus in North Manchester. This, in turn, is fuelling Greater Manchester as the UK’s fastest-growing city-region with an annual average growth rate of 3.1% (2015-2025), more than double the rate of the national average.
Yet there is a growing sense of urgency for the place-based real estate industry to more completely fulfil its potential as an economic enabler both in the UK and across Europe, as highlighted in the ULI and PWC Emerging Trends in Real Estate 2026 report and more recently explored by Simon Chinn (VP, ULI Europe) in Property Week. Real estate can and should function as an active facilitator of economic growth, with the NLA, GLA and LSR The Built Environment Sector 2025 report recommending a redefinition of real estate as a high-growth sector in the UK’s Industrial Strategy, allowing real estate to reach its full potential in support of city regional and national prosperity, alongside better outcomes for the lives of individuals.
But Does Place Based Investment Create Value for the Citizen?
It is critical to also scratch beneath the headlines of investor value and city region growth statistics to better understand if or how this value is being felt by local communities and individuals. Recent publications including the Cities Outlook 2025 report from Centre for Cities, and the Brabners’ Making Places Work report, begin to explore how economic growth and regeneration activities across the UK’s towns and cities are being felt by individual citizens, including through improved health and wealth outcomes and increased disposable income.
But which communities are experiencing these reported improved health and wealth outcomes and are these gains in disposable income simply a lag effect of predictably rising housing and services costs?
For example, of the top 13 ‘Most Improved’ Northern Local Authorities, highlighted by Brabners, 54% have experienced above average rates of residential churn over the last decade (after normalisation for the delivery of new housing stock and compared to each local authority area’s corresponding regional average). This includes Manchester, Stockport Trafford, Cheshire East, West Lancashire, Gateshead and North Tyneside. High relative rates of residential churn are not only destabilising for local communities, but also potentially mask analysis of underlying persistent challenges in health and wealth outcomes and amplify the impacts of selective migration.
In Greater Manchester, for example, this has been a longstanding point of contention with an ongoing conversation around who has benefited from the city’s growth, ranging from the 2020 BBC documentary series Manctopia, to Daniel Timms’ The Billion Pound Manchester Question article (The Mill, 2023). More recently, academic critique of supply-side, property-led urban development has also come forward (Goulding, Leaver and Silver, 2025).
Positively, Greater Manchester Combined Authority is now placing greater emphasis on Good Growth, rather than growth for growth’s sake. Under the Greater Manchester Strategy 2025-2035, the Combined Authority is making an all-place commitment, prioritising investment in both high-impact growth locations (e.g., MIX Manchester and Atom Valley), but also town centre revitalisation across all 10 boroughs, including projects like Wythenshawe Town Centre and Oldham’s Prince’s Gate. In doing so, it is seeking to create “a thriving city-region where everyone can live a good life”.
How we can help
The challenge of ensuring good growth that is felt by local communities and individuals, as well as investors and cities, is core to our mission at Hillbreak. As a firm, we accelerate impact and sustainability in public and private markets across the triple-dividend of investors, cities, and citizens. Our newly introduced Place Advisory team builds upon this expertise to shape positive change in the built environment with robust socio-economic evidence and ambitious strategic vision. We bring a wealth of experience in designing and implementing truly place-based strategies for the built environment, responding to locally-relevant challenges and opportunities and prioritising the delivery of positive impacts for local communities.
With this new place-focused capability connecting seamlessly with our wider expertise working at the capital allocation and investment platform levels, we’re ready to support our clients – and the wider market ecosystem – to strengthen the connections between strategic investment intention and effective local delivery which yield those enduring ‘triple dividends’ for capital, cities and citizens.
