Forecast for 2021: looking ahead with hope (part 21)

Paul Arenson

CEO, Stenprop

The pandemic has accelerated certain trends while entirely disrupting others, in some cases permanently. The large volumes of capital that might have chased office or leisure assets are now likely to be redirected to sectors offering near-term secure income and capital growth potential.

While we can all agree that the office has a future in corporate portfolios, our remote working experience has taught us that we may not need as much space as previously imagined.

Corporate travel to view assets and close deals will also be minimised given the efficiency of technological solutions that connect remote workforces. It is likely that workplace strategies will no longer revolve around all our employees being based in a central location and office portfolios will need to be adjusted accordingly.

The industrial sector offers resilient income and increasing ecommerce penetration continues to drive warehouse demand, with the pandemic accelerating the changing consumer behaviour underpinning this trend. The undersupply of prime last-mile facilities and land for additional warehouse development will continue to drive rental growth across the UK.

James Raven

CEO, Arlington

Last year was a divisive and brutal one. It is no surprise that these factors have exaggerated the impact of property and risk fundamentals on individual asset choices and accelerated some already evident trends.

I believe the vast depth of capital and a low, risk-free return environment means 2021 will bring continued growth in last-mile delivery logistics, while assets that attract specialist innovation or life science customers will become a premium asset class in their own right, given the income resilience and the direction of UK plc, as we strive towards a low carbon, knowledge based economy.

Last year taught us that the UK cannot be so reliant on global trade, travel and just-in-time delivery, and we need to structure our economy around a greater degree of self-reliance, like it or not. The oft-debated WFH threat will lead to more flexibility for some, but things will be far more like they used to be than many would have you believe. The biggest impact will be on commuting patterns and choice, but humans enjoy interacting and sharing a kindred purpose with other humans – not screens.

Ted Schama

Managing director, Shelley Sandzer

We’re in the eye of the storm and unlike other crises, where hospitality is last to fall and first to recover, this time it’s the polar opposite.

I hope for continuation of genius in hospitality, furthering the sector’s hard work of 2020. From DIY boxes a la Patty & Bun and Pizza Pilgrims, to finish-at-home meals from the likes of The Palomar, to added dimensions – my local pub is the perfect example, with its own wine shop – operators and landlords have adapted, so I have faith this will be enough of a head start, until stability returns and workers, shoppers, and international tourists come back in force.

I expect to see further operator and landlord casualties, but emerging from the rubble are turbo-charged next-gen hospitality brands. I also expect landlords will remain forward-thinking, pushing boundaries to make deals more viable for existing and prospective tenants.

Major issues that linger are unlikely to be resolved; the re-introduction of rates is my greatest concern, a frankly unfair hurdle for the industry. I sincerely hope a sales tax is considered, to replace this archaic model.