After two years of unprecedented challenges faced by real estate, experts share their predictions for 2022.
Executive director of development, Peel L&P
The pandemic is far from over and in 2022 I hope to see some control over inflation to avoid rising construction costs to support developers to deliver projects that will help the economy bounce back. For the same reason, planning processes and resources still need to significantly improve and decisions on local plans must be a priority to secure important land allocations and keep up with the pace at which new homes and investment in our regions are needed.
Covid-19 has sharpened the focus on the environment and social value. I’m passionate about regeneration that creates a great sense of place, and I’m excited to see projects come forward with more public realm and green space, community facilities and world-class leisure attractions to improve people’s health and wellbeing, provide opportunity and reduce the effects of climate change.
Managing director, Chancerygate
The market fundamentals that drove the industrial property sector’s growth in 2021 are as relevant now as they were at the beginning of last year. Notably, the lack of supply of grade-A industrial accommodation throughout the UK is at critical levels. We will continue to implement our nationwide growth strategy in 2022. We are excited by opportunities in the regions and have made hires in Bristol, Warrington and Birmingham to facilitate this.
More broadly, we expect the enhanced focus by institutions on industrial property’s ESG credentials will become an increasingly important factor for occupiers. I expect to see this create a disparity between rental and capital values of primary and secondary stock.
It will be interesting to see if the new industrial property rental tone of £30/sq ft set in London is sustainable, and how quickly and far the effect of this will ripple across the market.
Managing director and chief executive, Mitsubishi Estate London
As the world gradually adjusts to the impact of Covid-19, 2022 is likely to see a continued flight to quality from investors. Demand for prime assets has remained buoyant over the past 12 months and we expect that to strengthen further next year.
We also anticipate office leasing activity will accelerate as firms grasp the nettle on postponed decisions and are forced into action by lease events. Again, it is prime offices that will see the most occupier interest.
For us it is an exciting year, with our 8 Bishopsgate office tower completing and our South Bank project commencing subject to planning. We will also seek to grow our portfolio, be that in London or outside the capital. This is particularly the case for BTR, where we are looking to expand on our existing schemes in Nine Elms and Croydon, which will complete next year and in 2023 respectively.
Leasing manager, HB Reavis UK
This is a golden era for offices, as businesses rightly demand sustainable, amenity-rich and bespoke workspace for their employees to thrive. Yet, there is one area that has been left behind in this green and hospitality-focused revolution: the ability for businesses to expand and contract organically under one roof over time.
Working styles are changing, headcounts fluctuating and strategies evolving. Does it still make sense for companies to have to fit into a fixed footprint for five, 10, 15 years?
The buildings that can bend and shape around businesses, allowing them to grow and shrink with ease, will be the ones to reap the rewards in 2022. Those offering in-house, on-demand workspaces, such as co-working, meeting and events spaces, alongside guaranteed expansion rights to complement a core space tenancy, will provide true flexibility.
For this to work, landlords must incorporate these different workspace elements into the building design and form strong partnerships with their tenants from the very outset.
Predictions for 2022: Brace yourself…
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Predictions for 2022: Brace yourself (part nine)