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

Dan Parr

Vice-president, CACI

I hope 2022 is the year when all those invested in real estate acknowledge the time is now to be brave enough to reset. The power struggle between landlord and tenant of the past 30-plus years has concertinaed in the past 22 months. It has created a need to address values, space requirements, formats, lease structures and place proposition for all involved.

In the unrealistic historical value drive that created clone town Britain, the consumer is still king or queen. Let’s not just talk about the impact of localism, the green agenda, working pattern shifts; let’s use this period to reflect on what is actually needed in our towns and cities. Frame the offer to the demands and desires of those who live, work and play in these venues. Exceptional places, be they retail, office or leisure, will thrive and grow with fundamentals anchored in what their market needs.

Phil Irons

Phil Irons

Head of transactions UK and Ireland, PATRIZIA

At PATRIZIA, we anticipate the structural trends underpinning the beds-and-sheds sectors will continue into 2022. The UK industrial market has emerged stronger from the pandemic due to the growth of ecommerce and rising inventory levels of retailers.

Likewise, occupier demand has shifted to more urban, supply-constrained locations like London, which has lost more than 20% of its industrial space in the past 15 years. This supply-demand imbalance has driven strong rental growth over the past two years and shows no signs of slowing.

Student housing also continues to be supported by constrained availability and increasing numbers of mobile and international students. A combination of attractive yield premiums and resilient occupancy rates is fuelling investor interest in major European cities, particularly in the UK, which has the most mature and liquid student housing market.

Meanwhile, Europe’s ageing population is accelerating demand for both independent and assisted living, although the market remains fragmented country to country. The ability to provide integrated retirement care will be a key part of our strategy as we move through 2022.

Graham Sturge

Group managing director, RED Construction Group

Last year, the pandemic exposed the vulnerability of global supply chains and affected essential materials – this volatility is expected to be one of the main challenges for 2022. RED Construction Group is focusing on finding alternative material sources.

Despite significant headwinds, the industry responded positively; 2021 will go down as a key milestone for RED – we announced a new group structure and launched RED South West, establishing us across multiple regions and sectors. We are proud of our team’s achievements and our expansion will continue this momentum, enabled by the motivated and client-focused leadership teams in place.

There are exciting times ahead for us and the construction industry; 2022 is poised to be another rewarding yet challenging year of recovery – construction plays a significant role in the nation’s growth and provides a fresh perspective on current methods.

Karim Habra

Karim Habra

Head of Europe and Asia-Pacific, Ivanhoé Cambridge

With much of the industry looking inwardly to define what ‘the future of real estate’ could look like, alternative sectors and new trends will quickly emerge and drive business in 2022.

As new ESG and digital standards gather pace, the real estate sector will be working hard to ensure that portfolios can retain value in a time of change, or risk obsolescence. While the industry is addressing environmental impact, social impact has not yet been measured adequately and there is a lot of room for the sector to broaden its ESG horizons to improve sustainability in a truly local sense.

None of this can be achieved unless all players across the value chain can benefit from these new standards, and this is something that is likely to define success in 2022. In other sectors, there is no doubt that logistics will still be thriving globally, thanks to the growth of ecommerce and the development of last-mile facilities to meet surging demand.

Another sector likely to grow tremendously is residential, especially student accommodation and mixed-use developments combining residential retail and offices to maximise value.

 

Continue to part 38 here

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Predictions for 2022: Brace yourself…