After two years of unprecedented challenges faced by real estate, experts share their predictions for 2022.
Chief executive, MAPP
It will be interesting to watch the industry’s response to the Minimum Energy Efficiency Standard legislation currently being passed through parliament. According to data published by Cushman & Wakefield, only 4% of buildings in London have at least an EPC B rating, which shows the monumental scale of the challenge. We’ll see some buildings offloaded on to the market and bought by those who are prepared to invest to deliver a sustainable building that is relevant and in demand by occupiers. Some will be converted to residential but obsoletion will become an increasing problem.
All of these changes will be underpinned by technology as buildings increasingly become operating platforms, with strong, operationally intense property and sustainability management at the core.
Founder and chief executive, Mallcomm
It has been a challenging time for the retail sector, but I expect shopping centres and other retail places to bounce back stronger in 2022. One of the unexpected positives of the past year has been the closer collaboration between retail landlords and tenants. The requirement to close and reopen centres, comply with changing guidelines, renegotiate rents and in some cases shift to turnover-based leases have all ultimately increased trust and transparency.
This spirit of collaboration has driven huge demand for the Mallcomm tenant engagement platform, which is now adopted across 650 centres and 400m sq ft of retail space globally. By embracing technology and collaborating in real time, landlords and tenants will be able to deliver new initiatives that drive footfall and curate a better experience for shoppers that cannot be replicated online, helping to drive a strong recovery in the year ahead.
Executive director, Nash Bond
We saw resilience, creativity, optimism and a general belief in London as the best global city from the retail and F&B occupier community last year. There are clearly more hurdles to overcome, but we are looking forward to 2022 and the arrival of many of the new brands and concepts that we have been busy bringing to our clients’ estates and buildings.
We are entering a new era of retail and have already started to see a seamless interaction between online and physical store sales – the ‘phygital’ era. The emergence in London this year of some of the best hotels in the world with global dining and leisure experiences is sure to attract the tourist spend we are keen to have back. There will be an increased need to get the best property advice to make sure the complex market is well navigated.
Senior partner and group chairman, Knight Frank
We must all hope 2022 is truly the year of recovery from the pandemic. With inflation, interest rate, environmental and supply chain concerns, there is much to distract us; however, it feels as though real estate is well set for a very busy year.
The momentum of interest seeking real assets is growing and with investment and occupier markets re-engaging, there will, it seems, be greater competition for the very best across all sectors, residentially and commercially. Noting that, it seems London, and the wider UK, remain well placed from a global perspective. Expect much greater inward investment, which government must seize the opportunity to embrace.
Much has been said of the logistics and alternatives markets, where we can expect further growth in the next year, but to me the ones to watch for 2022 are offices and retail. Despite the doomsayers, it is very clear that while office layout and functionally are shifting, the value of a workplace is undoubted and evidenced by the strong re-engagement of applicants in the second half of the year. Yes, there are crucial issues around ‘greening’ of buildings etc and secondary assets will need careful review, but the better-equipped landlords are embracing this change apace.
For physical retail, I sense a clear turning point, the great shopping centres finding their place, adapting and confident in their offer and mix of uses, while the ‘not so good’ now offer a pricing profile that will attract the more adventurous asset managers focused upon repurposing assets strategically.
Continue to part 17 here
Predictions for 2022: Brace yourself…
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Predictions for 2022: Brace yourself (part sixteen)
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