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

EmmaCariaga1_Jan17-4561

Emma Cariaga

Joint head of Canada Water, British Land

As we approach nearly two years since the start of Covid-19, the real estate industry continues to show great resilience, but also an ability to listen and respond. Our customers have always wanted the best space in excellent locations, but the impact of the pandemic, and our intensified focus on the climate and social value, means they now want healthy places too.

At Canada Water, open space is effectively our ‘anchor tenant’ – 130 acres of parks, water and space to breathe. Alongside this, and as part of our path to net zero carbon by 2030, this new piece of city will be home to the largest cluster of BREEAM ‘Outstanding’-rated buildings in the UK.

Delivering real estate with high-quality income streams is contingent on places that are diverse and memorable. The secret to the success of places we love is them being ‘multi-use’, where customers feel an affinity and see an offer that resonates.

The industry’s role as custodians of space will rise in prominence and we all have a responsibility to deliver dynamic spaces to work, live and just be, which allow everyone to thrive.

Barry Jessup

Barry Jessup

Managing director, Socius Development

It was fantastic to track the increased importance of environmental sustainability in the decision-making of office occupiers (and consequently investors) in 2021. I expect that 2022 will see a rise in the prominence of the ‘E’ and the ‘G’ parts of ESG, as occupiers align themselves with their target employees.Developers will need to respond accordingly.

I also expect that BTR investors will follow their office counterparts and demand more sustainable products as they anticipate their future residents’ requirements.

I hope 2022 will also see the continued rejuvenation of our high streets as we replace outdated big-box retail and oversized car parks with a more interesting mix of uses and experiences, and encourage broader human and business interaction by reintroducing homes and flexible workspace into town centres.

Nido Darren gardner

Darren Gardner

Chief operating officer, Nido Student

This year, we predict the PBSA sector will continue performing as a strong asset class. Throughout the pandemic, it has shown incredible resilience and, due to significant investment across Europe specifically, has become a consistent news topic. The importance of safety and security is now paramount and has allowed PBSA operators to demonstrate their capabilities in providing a place of support.

Operationally, we expect to see the consumer experience taken to the next level. Residents will have hotel-style management alongside technology offerings and pastoral provision, meaning our communities will be more looked after than ever before.

As PBSA continues to be the desired choice of accommodation for many students, there lies an opportunity for investors and operators to capitalise on user feedback, as this will be the key to the economic success of a residence.

Robert Cotterell

Head of investment Europe and head of UK, Cromwell Property Group

The next 12 months will be really interesting in the UK. There are huge variances across a market where you can buy logistics at 2% yields and retail at 15%. It is unlike anything we have experienced. The sleepy property sector of a few years ago is practically unrecognisable.

The trio of the pandemic, increased focus on ESG and lingering Brexit after-effects are having a big impact, putting pressure on investment managers’ decision-making. Property is a long-term game and asset management is a bit like steering a ship, as small movements can have massive implications further down the road.

As investment managers, we must remain flexible. What’s happened to retail real estate is unlikely to be a once-in-a-generation event. Investable assets that hold their value over the long term will be easily adapted to a variety of uses and there will be more focus on development capability as a core skill set.

 

Continue to part 26 here

Topics

Predictions for 2022: Brace yourself…