After a tumultuous 2020, property’s leading figures share their hopes and expectations for 2021 as the year gets off to a rocky start with yet another lockdown.
EMEA managing director, VTS
If there is a silver lining to the challenges brought about by Covid-19, it is that it has brought to the fore the importance of technology to the commercial real estate industry, enabling us to work from home, continue collaborating, manage our businesses, and navigate challenging market conditions. Companies have been forced to embrace rapid change because the pain of not changing would have had a more serious impact on their business.
Having seen the positive impact of adopting technology and the cultural change required within an organisation to support that, I hope commercial real estate will continue this adoption of tech at the same pace.
If we have truly become more efficient through our use of technology and are used to working on the go, being mobile and accessing information at a click of a button, then surely we’ll be able to take some of that ‘free time’ to work on building relationships, spending more time on in-person meetings, networking, and catching up with friends or colleagues.
A decade ago, relationships were the foundation of the industry but, as the pace of work has increased, particularly across the younger generation, maintaining that culture has suffered. My hope is that technology empowers the industry to reaffirm what it is at its core: a relationship business.
I hope the old school becomes the disruptor – meet your friendly, service-orientated professional landlord, no longer the passive rent collector but instead your greatest business partner.
Open communication, managed spaces, flexible terms, business funding arrangements with access to cheap capital and exemplary customer service will all become standard. We need to reward the quality tenant with a true partner, not only when things are good but when things don’t go to plan.
The reported death of the office has been greatly exaggerated. Quality over quantity will be key, as occupiers flock back to the office once safe to do so.
Flexible working hours dictated by employees mean buildings will need to be accessible 24/7. Balanced with remote working trends, this will lead to the office becoming a more collaborative environment with a mix of social hubs and quieter deep work areas.
Weak development pipeline and lack of fit-for-purpose stock will lead to record rents for prime compliant space in due course. In stark contrast, inflexible terms and poor-quality stock will lead to bargain basement rents.
Executive chairman, ilke Homes
The government used the last few months of 2020 to announce its ambitious plans to combat climate change through its Ten Point Plan and energy white paper.
The MHCLG and Homes England have also continued to show real foresight and leadership in backing modular. However, in 2021, policymakers must ensure that energy policy and building regulations are more joined-up.
The government cannot make the costly mistake of delaying the introduction of greener building regulations.
We can already deliver zero-carbon homes and we should not delay rule changes any longer. If ministers were to speed up planning for eco-friendly, modular homes which offer better thermal insulation and create less waste than traditional construction, we could show the world we mean business ahead of the UN Sustainability Conference COP26, in November.
Above all, this can play a huge role in re-skilling those out of work and providing jobs. Our factory in Yorkshire has manufactured homes on a production line for sites from Somerset to Gateshead. Tightening rules encourages change and we cannot delay our climate response any longer.
Last year was extremely challenging for the hospitality sector, resulting in multiple CVAs and increasing levels of vacant property, but we expect the full impact of Covid-19 to be felt in H1 2021 once government support is withdrawn, with the vaccine and gradual return to work building confidence thereafter. Forward-looking operators will look to selectively acquire in this period.
The successful external dining initiatives we witnessed last year will return and will likely become a way of life. We hope that the speedy and flexible responses in planning and licensing become the norm, to help reshape our city centres. In the short term, we hope to see a dedicated minister for hospitality. The lack of voice at ministerial level has led to cumbersome interventions that have displayed a lack of understanding of the sector.
As lease structures change across all sectors, we hope the valuation system will reflect a more partnership-based approach. We also hope business rates do not return and the tax system is reformed to create a level playing field with ecommerce.
Forecast for 2021: looking ahead with hope
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Forecast for 2021: looking ahead with hope (part 13)