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.
CEO, APO Group
This year feels set to be a seminal one for the UK residential sector. For 10 years it’s felt like we were on the brink of UK multi-family housing taking off in a big way, but it’s proved to be more evolution than revolution so far.
This time feels different though, and it’s Covid-19 that’s tipping the scales. Before the pandemic, appetite for real estate from global institutional investors had already hit a seven-year high.
Then the first lockdown put a spotlight on the substantial differences in resilience of real estate sectors, and the early figures really were stark: 95%-plus residential rent collection but less than 50% for commercial.
No surprise then that we’ve seen a wave of increased allocations to residential real estate, but it has been extraordinary to see the extent to which overseas capital targeted the UK last year, despite Brexit uncertainty: there was almost seven times the quantum of cross-border capital invested in UK multi-family than US multi-family housing in Q2 2020.
So, I expect 2021 to offer us huge potential for growth. The key to capitalising on it will be marrying investors with developers and residents to make the sector work for all three.
CEO, Greenman Investments
Grocery is an anomaly in the retail sector, having had a strong run during the pandemic.
The Greenman Group specialises in acquiring and operating real estate investment funds focused on European grocery retail and we plan to use what we learned during the stress of the past year to better understand and enhance the vital role bricks and mortar stores can play in future grocery and essential retail operating models. The difficulties that many large grocers have faced attempting to make online delivery profitable, as well as to scale the model to meet demand, have been brought into sharp resolution by the pandemic.
The model that is emerging combines physical and digital assets in various configurations, depending on the catchment areas, cultural differences in consumer behaviour and variance in regulation.
Chair, HTA Design
I have just sent to the publishers the first draft of a book for students and young professionals who plan and design housing, written during the pandemic, which has ruthlessly exposed the weaknesses of our housing system, heightened by long periods of enforced isolation. So this is not a bad moment to reflect on the future.
My focus in the book on wellbeing and a fair allocation of scarce resources reinforces our sense that the industry falls short of the collective effort needed to overcome the linked challenges of climate change, public health and the collapse of the biosphere.
At HTA, we are really excited by the results that can be achieved with a truly creative collaboration of all our professional disciplines; environmental engineering, planning, landscape design, communication design, as well as architecture. More of that in 2021, please.
The UK’s science and tech ecosystem shot to prominence in 2020 as incredible breakthroughs were made in response to the pandemic, from Oxford’s development of a Covid vaccine to Microsoft and NHS Digital introducing new applications to Teams to support medical staff dealing with the virus.
Government rightly sees the science and technology sector as a key area that can deliver high GDP growth, hence its plans to provide almost £15bn for R&D in 2021.
The private sector is equally enthusiastic, resulting in large-scale venture capital flowing into science and tech companies.
Bidwells forecasts that the ‘Oxford-Cambridge Arc’ will represent almost 11% of UK GVA by 2050, up from 6% today, equivalent to £100bn a year. Accordingly, a number of new science and tech property platforms for both UK and overseas capital are focusing on the British core markets of London, Oxford and Cambridge and the real estate market in these areas is maturing fast.
We forecast large scale capital will continue to flow into the market in 2021 for existing assets and new developments. In our own core market, Cambridge, we expect to see robust demand and continued rental growth.
Director, Evans Randall Investors
In the rush to draw a line under 2020, we must not forget what we have learned over the past 10 months of huge political, social and economic change and make a collective resolution to build on the many innovative ideas, sparked or accelerated by the pandemic that seek to make our sector more responsible and sustainable.
The themes of decarbonisation and electrification fit into these categories and are an increasing focus of our outlook for 2021 and beyond. Covid-19 has unquestionably changed the office environment, but it has also highlighted its importance.
London’s long-term positives continue to endure and drawing a line under Brexit will bring a greater certainty that all investors will appreciate.
Forecast for 2021: looking ahead with hope
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Forecast for 2021: looking ahead with hope (part 33)