After two years of unprecedented challenges faced by real estate, experts share their predictions for 2022.

Dan Austin

Daniel Austin

Chief executive and co-founder, ASK Partners

Rising inflation was the talk of 2021, prompting increased investment in property as an inflationary hedge. A buoyant market across a breadth of asset classes has seen build-to-rent lead the way, particularly with regional schemes of private family accommodation.

The repurposing of retail has offered strong opportunities, including student accommodation, but resilient brands that survived the pandemic are also underpinning retail investment. Offices bounced back strongly with demand for higher-quality space. Similarly, hotels were bolstered by a VAT reduction and a pent-up demand following the return to international travel. Life sciences broke records, with the pandemic focusing investor interest in the sector, and soaring online shopping growth saw investment in warehousing reach new heights and underpin land values on well-located large sites.

I think we will see further growth and more institutional money flowing into alternatives in 2022. This will create increased competition, tighter pricing and therefore lower returns.

Mark Furness

Mark Furness

Founder and chief executive, essensys

The commercial real estate industry is limited by the silos it has historically built. Our hope is that as we emerge from the pandemic, we move to a place where technology is seamless, and disparate systems become a thing of the past, better connecting traditional landlords and flexible workspace operators to their customers.

As flexible workspace strategies become more prevalent, underpinned by changing working practices and driven by occupier demand, we will continue to see a need for a more holistic approach to technology. A single platform, built on a secure and robust digital infrastructure, can become transformative, integrating multiple components of portfolio management and delivering excellent in-building experiences.

This unified approach, where technology and real estate work in harmony, can effectively deliver for tenants seeking spaces that align to their business needs and employee health and wellbeing. Through an approach built on collaboration and integrated learning, we can thrive in the evolving post-Covid landscape.

Dominique Moerenhout EPRA

Dominique Moerenhout

Chief executive, European Public Real Estate Association

One thing 2021 showed us was the listed real estate industry is 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 the year, and exceeded them since, is testament to the industry’s remarkable 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 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 past 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 the impact of Covid – and retail will be well placed to benefit from the vaccine booster programme, which continues to pick up pace.

Guy Horne - HSPG

Guy Horne

Chief executive and co-founder, HSPG

With 2021’s building targets missed due to supply and labour shortages and the ongoing pandemic, the need for affordable housing in 2022 will be even more urgent. House price increases are unlikely to slow significantly and the rise in energy prices adds to the financial pressure on those already struggling to pay rent. Whether it be through increased retail-to-resi conversion schemes or new builds, we must ensure that housing provision can meet the considerable demand this year.

Similarly, increased efforts must be made to redress the geographical balance of housing investment, with London and the South East having been historically prioritised. The government’s levelling-up agenda must be reflected in greater investment in the north of England in 2022.

Sustainability will play a major role in construction this year, after COP26 highlighted the urgent need for action. Ensuring that new builds are constructed to the environmental standards required to meet net zero targets is an important investment in the future of the whole planet.

 

Continue to part 22 here

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Predictions for 2022: Brace yourself…