After two years of unprecedented challenges faced by real estate, experts share their predictions for 2022.
We’re going to have to live with Covid, but undoubtedly it has shaped our way of life and will do so moving forward – with more flexible working and a greater emphasis on local economies. I’m excited for the opportunities ahead, especially with the return of our town centres. For so long we have seen regimented retail, business, leisure or residential zones, without the understanding that these should work in unison. A carefully curated blend will allow for a diverse economy creating a genuinely exciting place to live, work and play.
There have been some exciting shopping centre takeovers, and with the loss of department stores on many high streets there is ample opportunity in 2022 – especially with a greater take-up of management agreements. Coupled with this, the government’s levelling-up agenda will start to build momentum – there is only prosperity ahead for our sector if guidance is embraced and creativity is enhanced.
Managing director UK, Linesight
Covid will continue to affect the construction sector in 2022, with supply chain and inflation issues persisting. Intelligent procurement strategies will be required to mitigate associated risks across all sectors. Increasing pressure to combat Covid-19 variants will drive particular demand in the life sciences sector, including the construction of rapid-build vaccine manufacturing facilities and a growing trend to repurpose existing commercial real estate for combined office and laboratory facilities, mainly in urban locations.
The shortage of specialist data centre contractors will continue to affect tendering in this sector, resulting in clients seeking to negotiate with preferred partners. Many will switch to a two-stage procurement approach to mitigate risks on long-lead-time items.
Following on from COP26, we anticipate strong growth in our work in the hydrogen and gigafactory areas, with increased focus on available and economical renewable power sources. Across all sectors, advanced strategies and early engagement with suppliers will be required to procure the right materials and products, at optimal prices and with the shortest travel times.
The vibe of 2022 will be similar to the year after the economic crash, with optimism in the air but hesitancy to commit, which will warm with the seasons. Earmarked redevelopment projects are likely to be sat on, due to the cost of materials and the lack of skilled workers; creating more meanwhile use and grey space – which is the breeder and feeder of small businesses as barriers to entry are much lower.
Hybrid working is here to stay, despite the reintroduction of some restrictions towards the end of last year. The ratio of work from home days to in the office is 2:3 but I suspect next year it will change to fall in favour of the office. The challenge to businesses, especially corporations, is to use flexible space more, which I suspect will become more of a feature in property strategies moving forward – it’s also more cost effective than signing a long-term lease.
Managing director, Sterling Property Ventures
The industry has now had the better part of two years to come to terms with major, likely permanent, changes in the way we work.
This period has especially highlighted the importance for companies and their employees to maintain access to physical workspaces that facilitate key benefits such as better collaboration, productivity and a strong sense of company culture. This year will therefore be one where lessons learnt throughout that time will be put into practice.
A ‘flight to quality’ is already well under way in major population centres like Birmingham, where we are delivering 103 Colmore Row, the tallest office building under construction outside London. I believe this growing demand for grade-A space will continue to spread into regions beyond the West Midlands and the South East, especially as the government ramps up its levelling-up agenda.
Whether new builds or retrofit, developers must be more prepared to deliver high-quality schemes in the right locations throughout the country to meet the evolving needs of businesses and their workers.
Predictions for 2022: Brace yourself…
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Predictions for 2022: Brace yourself (part twelve)