After two years of unprecedented challenges faced by real estate, experts share their predictions for 2022.
Chief executive, AirRated
Now, more than ever, there needs to be a conscious effort to create and consistently deliver healthy buildings. There has historically been a lack of accountability in terms of who is meant to take the time and make the investment in doing this – but now the cost of doing nothing is hurting all stakeholders. A ‘sicker’ building is a less valuable asset, is a property management headache and hurts a company’s bottom line. Most importantly, unhealthy indoor environments can seriously hurt our health.
In 2022, I expect to see the increased communication between landlords, occupiers and building users capitalised upon to create healthier spaces. This can only be achieved through a collaborative approach and some pretty clear lines drawn in the sand regarding responsibility, decision-making and investment.
My hope is that all buildings adopt continuous air quality monitoring as standard, to facilitate informed decision-making, and that building owners/users continue to engage with specialists to understand this data and maximise its value
Chief executive, Newcore Capital Management
My hope, as is no doubt the case for all contributors, is that 2022 is the year we see the back of Covid-19 as a deadly virus disrupting society. I hope, too, that the property and capital management industries continue along their nascent path of putting ESG at the centre of how they operate – the real estate sector, in particular, suffered badly in the pandemic given it was seen as a bad actor, rather than the key to sorting out the societal and environmental problems we all face.
My expectations are that logistics will be rebranded motorway retail (as opposed to high street retail); a carbon tax on property will emerge along the lines of business rates; and a revitalised RICS will start to focus on advising its members on how to measure and report environmental and social impact, instead of zone-A rents, which is hard to do for a shed!
While 2020 disrupted everyone’s working habits, 2021 saw most workers find a new rhythm that worked for them individually, with people exploring different working patterns and spaces. We saw this play out in our own flexible workspaces, which experienced a boom in demand. We expect this demand for flexibility and variety to accelerate in 2022.
Landlords are increasingly realising the power of flexible workspace to animate their buildings – providing both amenity and financial diversification – and as such, we expect to see more building owners integrating flexible workspace into their strategy, often as ground-floor enlivenment and in city centre locations.
The pandemic has also made landlords super-aware of the precarious nature of leases and we expect to see more working in partnership with operators, with shared risk and shared reward. This is a model that we have always been fully committed to and believe in wholeheartedly.
Chief executive, EPRA
One thing 2021 showed us was that the listed real estate industry was incredibly resilient. Nowhere has this been truer than in the
UK. To have returned to pre-Covid levels by the end of the first half of 2021, and exceeded them since, is testament to the industry’s strength and ability to bounce back.
Of course, we cannot ignore that the pandemic is not yet over, and fluctuations are inevitable, especially as we continue to navigate through Covid variants. However, I do firmly believe we will continue to see a real confidence settle in the market with a persistence of the recovery and growth that has underpinned the last 12 months.
The likes of self-storage, logistics and residential will continue to build on their significant gains, while the office sector – having returned to pre-pandemic values despite its exposure to the pandemic – and retail will be well placed to benefit from the vaccine booster programme, which continues to pick up pace.
Predictions for 2022: Brace yourself…
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