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.
Managing director, TopHat
A year of living and working at home will translate into an increased focus on the quality of our living spaces in 2021, with customers placing greater value on good-sized living spaces, natural light, and homes that can comfortably be used for work.
The construction industry faces a capacity and a skills gap to meet the government’s aspirations to build 300,000 homes a year. Meeting this challenge will require local authorities to resume the vital role they played in delivering new homes decades ago.
It will also require the creation of more high-quality construction jobs. Around half of all construction workers are nearing retirement age and too few younger people choose to work on building sites. Off-site manufacturing can help meet this challenge, offering more tech-enabled, stable jobs in a fixed location.
In the run-up to COP26, the quality of our environment will become a key theme. The government is moving ahead with ambitious climate change targets, which modular housing, with its precision engineered airtight construction, can already meet. The government should be bold when setting energy efficiency targets for new homes, and must also start to mandate higher standards on the whole-life carbon cost of new development.
Managing director, Perkins & Will
Last year was a challenging one and was transformative for many sectors, including us specialists in architecture and interior design. There has been speculation around the need for a physical office, with companies like Twitter going remote permanently.
However, the office still plays an essential role for many businesses. We anticipate that offices will become hubs for socialising with colleagues, training and collaborating on projects and activities requiring spontaneity or fast-thinking.
Companies will be looking to restructure how they work and operate, whether downsizing to support smaller numbers of employees coming into the office or redesigning to implement more social and collaborative spaces.
In weaker office markets, there will be opportunities to help solve issues the country faces by repurposing offices into mixed-use developments or labs. Our towns and cities are in need of more centrally-based housing and facilities which support healthcare. Now is the time to get creative and rethink the purpose of existing buildings.
Much has been written about digital acceleration in the property sector over the past 12 months, often as a means of weathering the worst of the pandemic and for assisting in building back better in the coming months.
While the residential property market has in many ways led on digitalisation, particularly on the sales and lettings side, its usage on the investment side has lagged behind. However, this is set to change. IMMO Capital is leading the breakthrough in technologies such as AI and machine learning to generate data and insight, allowing for smarter investment decisions, the identification of more attractive locations, and generating the ability to deploy capital faster and at scale.
These innovations are unlocking the potential for high-performing single-family residential portfolios, which are already growing in popularity, particularly in the US.
A data-led approach can drive efficiencies through every stage of sourcing, underwriting and acquiring portfolios, as well as aggregating a huge wealth of data that can be used to unlock further value for investors.
As with any time of economic uncertainty, a lack of transparency can impact confidence and while investors are chasing yield, they are also chasing stability. Quality data helps to solve this conundrum, with better-informed decision making and risk management helping investors take bolder steps when it comes to newer, alternative asset classes.
Managing Director, Plexal
We are excited about the level of transformation 2021 presents, not least in the future of work category. I expect this will lead to a significant re-alignment of commercial real estate as the economy recovers and people reconsider what the office means to their organisation, their customers and their culture.
I expect to see a move away from densely populated city districts to more polycentric urban landscapes. Many people have appreciated the flexibility of working from home, but others have struggled with working from their kitchen tables all year.
We can expect increased demand for flexible workspaces closer to where people live and I hope this will create more established and thriving local communities with improved professional capacity.
Over the five years that follow the pandemic, even the look and feel of an office will become different. It must be about collaboration and facilitation, networking and engagement, rather than simply a place to convene.
Chief executive, Navana Property Group
Unlike the naysayers of our sector, I’m not bracing myself for a huge tumble. I’m raring to go and excited to build on some of the changes accelerated by the pandemic.
How can we adapt to new ways of working? What will the meteoric rise in e-commerce mean for retail? These are the issues investors and developers are grappling with, and there are opportunities in the solutions.
For hospitality, I hope we’ll see meaningful change to the standard fixed-lease model, which has shown itself to be unsustainable in times of economic flux. Adopting the Continental variable rent model would provide greater resilience to businesses that are vital in creating and sustaining vibrant places.
Mixed-use estates of the future will look very different to the way they did 12 months ago and proactive management of these spaces is more important than ever to maximise value for asset owners and meet changing consumer needs.
Forecast for 2021: looking ahead with hope
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Forecast for 2021: looking ahead with hope (part 29)