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.
Chief executive, Palace Capital
I hope we will see a stronger economic recovery than the pundits expect; the UK is constantly underrated. The real estate sector is amazingly resilient and has many talented people, so once the vaccine begins to get rolled out at scale, I anticipate that we will see recovery in those sectors that have been somewhat left behind.
At Palace Capital, we are already seeing a recovery in the leisure sector, with a number of units under offer, where only a few months ago we had no interest at all. Several restaurant operators are starting to take advantage by leasing units vacated often through a CVA.
Interest in the regions, particularly the North, is increasing and once the government announces a major office move in that direction, it can only accelerate.
The demise of the office has also been greatly exaggerated and while we see more flexible working, there will be a gradual return to the office. Working from home for a prolonged period has led to a decline in productivity.
Logistics will continue to be in demand but with yields tightening investors may look for alternatives. Finally, I expect to see more transactions in the listed sector, either through private equity acquisitions or consolidation.
Chief executive, Harworth Group
More than anything, my wish for 2021 is for a safe vaccine to be delivered across the UK to allow some degree of normality to return. The industry has dealt with the pandemic admirably, but I worry about the long-term effect it will have on communities and mental health.
The big social challenges of our age have become more pressing as a result of Covid-19. Increasing the supply of new housing, raising skills levels at all ages to improve productivity and decarbonising our environment all need a greater focus from government and industry.
We are also keen for the government to deliver on the promises of its Comprehensive Spending Review on its National Home Building Fund and much-vaunted £4bn levelling-up fund. Progress here will be an effective yardstick for the government’s ambition to rebalance the economy.
Harworth’s ambition remains as before – to create great places for people to live and work across the North and Midlands. The way we will do this will evolve, however, in line with what people want and in planning for the future.
This will include a greater focus on building active and public travel into our masterplans and major developments to support wellness and decarbonisation, while also bringing forward light and heavy rail uses on sites such as the former Ironbridge Power Station, in line with our strategy to re-use as many former industrial assets on our sites as possible.
Finally, I am keen to diversify the housing tenure range across our sites to further accelerate build-out rates and play an even more important role in supporting the delivery of the national 300,000 homes per year target.
Senior partner, Gerald Eve
Leisure’s 2020 famine could become a feast when we finally start to make up for lost time. I also expect climate change, the high street and housing affordability to rise up the agenda.
Real estate is central to addressing these challenges, as well as the wider recovery, and the sector’s entrepreneurial spirit will see it adapt and succeed, whatever 2021 throws at us. This optimism is tempered by the hard times ahead, as we deal with the end of the pandemic and a new relationship with the EU. We must all hope the opportunities touted by the Brexit campaign come to fruition and it is Christmas pudding not humble pie being eaten this time next year.
This year will be all about dealing with the pandemic’s long-term fallout, and eyes will turn to those who “did the right thing” during the dark days of spring and early summer. Those that acted with integrity and in good faith, putting the needs of clients and society above their own, will be best-placed to succeed.
Head of UK, Convene
Amid the debate around the future of the office, the strongest argument to emerge is that the future will be hybrid. In 2021, we will start to see what that means in practice.
The emergence of new workplace dynamics will feature hybrid workdays, inclusive flexible office structures composed of redefined headquarters, various global meeting and collaboration spaces, and the continuation and improvement of remote workspaces.
Some interesting new workplace strategies are already emerging, with corporates envisaging a future where their workforce is more geographically distributed. This will result in a complete shift in the urban landscape, with talent moving away from city centres, thanks to more personal freedom over when and where work is completed.
Headquarters and regional hubs will be much smaller and focused on engagement and building trust. They will be designed completely differently and focus on teamwork over individual work and higher end experiences and amenities. In short, they will need to be even more of a destination than they were already striving for pre-Covid.
CEO, Newcore Capital Management
My hope is that the UK will wake up to the egregious structuring tactics that some online retailers have used to reduce their UK corporation tax bills and boycott them in favour of more sustainable models.
I expect parts of the high street to have a renaissance of independent traders, as landlords are likely to be prepared to accept low base rents rather than the empty rates bill, so we might see the return of butchers, fishmongers, bakers and grocers selling local product, although that doesn’t fill department stores.
Affordable housing levels will continue to suffer as developers take edge-of-city land through planning for industrial (now at higher residual values) rather than residential uses.
The social infrastructure sectors in which Newcore specialises should continue to gain popularity in the mainstream, given their robust performance through the Covid shutdown.
Finally, I expect more business leaders – often with 25 years or so of their own business careers left – to realise that this also ties in with the time left to save the planet and rebalance society, and so to refocus their own efforts on those critical goals.
Forecast for 2021: looking ahead with hope
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Forecast for 2021: looking ahead with hope (part 20)