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.
Head of business development, BMO Real Estate Partners
Rates of activity across the real estate world will vary greatly depending on the underlying use. Trends that had long been at play have gone through a significant acceleration brought on by the pandemic.
The very welcome accepted rise of ESG into a key and mainstream focus for investors and managers, along with a focus on sustainability of income and real estate as a service, will remain at the forefront of investors’, customers’ and managers’ minds.
CEO, Nido Student
The purpose-built student housing (PBSA) sector has remained remarkably resilient through the pandemic and everything is pointing towards it continuing as a stable, long-term investment. However, the normal cycle will be disrupted due to universities blending starts and flexibility shown to international students in particular, who form a significant weighting within the private PBSA sector.
We cannot discount the impact of further Covid-19 restrictions and lockdowns. But for now, yields remain consistent and valuations are holding steady.
CBRE predicts that around £1bn of PBSA deals are on the table in the UK alone. We predict a return to business as usual from September 2021, as the sector catches up, students get to grips with the new normal and the results and placement timetables get back on track.
Tech will become even more prominent in the resi-rental space in 2021, building on the growth we saw last year.
In a market that is more competitive than ever, investors increasingly require the tools to make highly targeted, well-calculated investments at a hyper-localised level – and this demand will only be met by embracing tech-driven approaches. AI and data-driven solutions, in particular, will continue to unlock the potential of the PRS.
With the BTR sector alone unable to meet demand for new homes, tech-led approaches to maximise use of existing stock can help identify investment opportunities at pace and scale, empowering investors to tailor their portfolios to evolving priorities. Sustainability, for example, will continue to rise up the agenda as we hopefully emerge from the pandemic.
Keeping abreast of tenants’ expectations will be vital for PRS owners to differentiate their offerings in an increasingly competitive space, and tech will feature high on tenants’ list of must-haves in 2021. Investors should act soon to enhance the profitability of their portfolios.
The pandemic has prompted many of us to adopt healthier habits and I hope this trend will continue. The government’s £2bn cycling infrastructure fund will make this transition easier. So will the move towards local offices we’ve observed over the past six months.
Working from home has been challenging for many from a mental health perspective and we have seen growing demand for day office passes, which are great for those who want to work from an office near home.
The office as a concept is not going anywhere, but I expect a shift towards working near home, now that we know what it’s like to live commute-free.
CEO, Public Sector Plc
With more than 200 world leaders arriving in the UK for the UN’s climate change summit 2021, our biggest collective hope must be that nations agree greater commitments and allocation of resources to reduce carbon emissions.
To deliver net zero carbon, we need more councils and combined authorities to follow the lead of Greater Manchester, Bristol, and Nottingham and make firm commitments on becoming net zero carbon areas and decarbonising buildings.
Having decided to invest in developing net zero carbon modular homes, we know this is not easy, but it is a challenge we must rise to. It is concerning that it was delayed last year but we should retain hope the English devolution white paper puts more power back into the hands of local decision-makers to help them lead the economic recovery and level up the regions.
Covid-19 has changed us all and presented a once-in-a-lifetime opportunity to change how we work and lead to more consumer spending and investment in local town centres. I dearly hope we remember the lessons of Covid-19 and grasp the opportunity to improve our town centres, work-life balance and workplace productivity, and reduce our carbon footprint.
Forecast for 2021: looking ahead with hope
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Forecast for 2021: looking ahead with hope (part 28)