After two years of unprecedented challenges faced by real estate, experts share their predictions for 2022.
Director of development, St James Quarter
From a retail perspective, the past year has seen a period of enforced change across the industry. The predictable acceleration of consumer trends has seen the waning of dedicated shopping schemes in favour of more mixed-use destinations.
As the only UK major retail-led opening of 2021, St James Quarter in Edinburgh was already building towards capturing these trends and retail’s growing role in the wider community is vindicating our approach. Housing, leisure and events are now the key components for a successful retail-led scheme, and it is what we have been building at St James Quarter. Flexibility is also important, enabling different uses and experiences to be added and changed over time.
Ultimately, there is a growing recognition that in the world we now live in, the ability to change, and change quickly, is vital. This is built into the fabric of new, leading-edge, modern projects such as St James Quarter.
Founder, Showhere
Omicron has shown that anyone waiting for an ‘end’ to the pandemic is in for a hard time. Regular boosters, designing wellness into architecture, but crucially doubling down on ability to do business digitally, will all now be part of daily life.
At Showhere, we have noticed that viewings are still important to the sales/leasing process but that professionals are increasingly turning to digital solutions such as ours to supplement them. Sales and leasing professionals will need to be able to get deals over the line both in person and digitally and should seek partners who are successfully helping landlords already.
As Covid moves to endemicity, the focus will be on climate concerns. Commercial real estate will continue its sustainability acrobatics to attract tenants, which is working, but will need to figure out how to stand out in a forest when everyone is a tree.
Chief executive, AshbyCapital
This year will be an interesting one for workplaces, with businesses and individuals settling in to hybrid working and finding the balance that works for them. ESG will continue to be a major consideration. With 80% of office stock set to be obsolete in the next 10 years, there is a huge opportunity for property companies that understand regulatory and occupier requirements.
I expect increased repurposing of existing buildings, given a heightened focus on embodied carbon. Well-located retail that merges digital and physical will also do well, as consumers seek experiences and increasingly question the environmental aspect of shopping online.
In terms of investment, notwithstanding any further shocks, I expect a return to pre-pandemic volumes. London has demonstrated significant resilience and remains top of global investors’ wish lists, so I anticipate a resurgence in international investment in the capital.
Global CIO, Head of Investment, AXA IM Alts
Last year was a watershed one for ESG, with much talked about ambitions across the industry translating into tangible investment strategies and returns. With critical stakeholders including providers of debt and equity capital, who are seeking partners most committed on the topic, and occupiers, who are demanding buildings with the highest sustainability credentials, we see this trend continuing at pace in 2022 and beyond.
The decline in the use of the term ‘alternative sector’ is encouraging and should continue as emerging high-growth sectors become more mainstream and investors see the important role these assets can play in their portfolios.
European life sciences and healthcare will remain attractive for those with the operational expertise needed to realise these opportunities. The strong structural tailwinds supporting the residential and logistics sectors, which dominated investment activity in 2021, should remain at full force.
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