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, IPUT
As we entered 2020, we had already begun to examine the importance of placemaking for the future of the office, our communities and our cities. That research took on new meaning with the onset of Covid-19 and has strengthened our view that we need to carefully think through the work environment to ensure we maintain attractive and vibrant places within our cities.
While remote working taught us many lessons in 2020, it exposed the importance of social and cultural engagement among our workforce. While we now know that people can technically work from home, our ‘Making Place’ research report identified the economic, social and cultural reasons why they shouldn’t.
We think developers, planners and occupiers will need to recalibrate the relationship between workers, the office and the local community. Workplace-making will become progressively evident in office development.
This year is likely to be another year of adjustment as economies and companies deal with the aftermath of 2020. We are cautiously optimistic and believe our primary exposure to offices and logistics positions us well to perform in 2021 and beyond.
Chief executive, RDI REIT
Despite the socioeconomic impact of Covid-19 and the polarisation of political agendas, last year was also a year that brought out the best in many people. There was greater appreciation for key workers, greater urgency around climate change and major achievements in medical science, providing hope that the worst of the pandemic will be behind us soon.
My optimistic view for 2021 is that recent shocks have accelerated desperately needed changes across the industry. The prominence of ESG has continued to rise despite the distractions of the past year. In addition to commitments from governments and corporates, I expect individuals will begin to force the pace of change through positive ESG choices as consumers.
The structural impact on the retail sector has been painful for many but has opened the door for redevelopment opportunities in a post-Covid economy. In the office market, owners of real estate will need to develop a far greater understanding of corporate real estate strategies and what functions and services will attract employees back into the office.
I hope London reaffirms its position as a leading global city by backing emerging sectors including technology, media and science.
Restaurant director, Shaftesbury
Collaboration will be key in 2021, particularly between operators and landlords, but also with our local authorities and the wider community. Shaftesbury’s position is very much that we and our tenants are dependent on one another. That means listening, understanding one another’s perspectives and businesses, and working together to find practical solutions.
The next few months will continue to be tough and some big issues beyond the pandemic need to be addressed, such as the timing of the withdrawal of the business rates waiver and potential rating reforms, VAT and the end of the furlough system.
There are also plenty of positives and reasons to be optimistic. Consumers will always want to socialise with one another, be it in households or mixed groups, and they also want to support the hospitality industry and their favourite local venues.
There will also be new opportunities for creative operators to launch new concepts or expand existing ones. The smartest operators have adapted to deal with the challenges of the here and now, and are now turning their attention to the what next.
Growing certainty over vaccines is combining with an acknowledgement that while consumer behaviour has changed, our desire to socialise, eat and drink out remains undiminished.
Just when it felt like building owners were finally grasping the nettle in providing more flexibility for customers, 2020 pushed that process so much further.
This year, the trend of office ownership shifting from what was once a bond-like investment into what is more akin to creating an operational and service-based business, will continue. As in the hotel sector, brand, operational excellence, customer reviews and profitability will play an increasing role in an asset’s value.
Building owners have begun to think about tenants as customers with business needs, but they must go one step further and anticipate the day-to-day needs of individuals within these businesses. Flexibility and choice have never been more important. Not only will businesses want increasingly flexible terms, excellent amenities and turnkey space, they will also want access to multiple locations and a variety of spaces for employees to work from.
Last year all but killed off flexible operators leasing buildings, so it is our view that we will see major changes to the leased operator model. Building owners will decide whether to build operational businesses themselves, which for all but the biggest will be unviable, or otherwise buy in the operational services.
Founding partner, Deutsche Finance International
We were all pleased to wave goodbye to 2020, but let’s also not forget it provided countless examples of heroism, kindness and resilience. My hope for 2021 is that with the rollout of the vaccine, we will be able to again enjoy a family holiday, a meal with friends or just a hug.
I expect the economic legacy of the crisis will be a longer cycle of lower growth, inflation and interest rates as we manage a heavier debt burden and face similar structural challenges that existed before the pandemic.
That said, I hope a gradual end to lockdowns will not only bring our society immense relief and happiness, but also unleash pent-up demand to help our economy recover. I also hope the rapid technology adoption seen in the crisis, linked to the acceleration of various trends, will become an inflexion point for tech-enabled productivity growth.
I expect real estate to become a more operational asset class, ESG will retain centre stage and, as an investor, uncertainty and risk aversion, as well as profound changes to certain types of real estate, will allow us to utilise our experience and resources to solve problems and unlock opportunities.
Forecast for 2021: looking ahead with hope
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Forecast for 2021: looking ahead with hope (part 30)