After two years of unprecedented challenges faced by real estate, experts share their predictions for 2022.
Chief executive, Burrington Estates
I believe our three businesses are well placed to move on strongly. Our housing business has six new sites starting early next year and we believe the low supply and high demand dynamic will keep regional housing buoyant.
Our small industrial unit business has pre-sold all current units and is buying four new sites. Our multi-let commercial business is enjoying strong demand across all sectors: offices, industrial and small amount of leisure. Obviously the biggest risk is further economic uncertainty from Covid, which is very difficult to predict.
Property director, Sloane Stanley Estate
The property industry has shown tremendous resilience over the past 12 months and demonstrated that it is more able to adapt and collaborate than many of its counterparts.
We saw the emergence of several new, positive high street trends that I hope will thrive in 2022. These include the movement to a more localised retail offer that flexibly responds to changing consumer behaviours, and greater landlord-tenant collaboration ensuring the community is woven into the fabric of the everyday shopping experience.
Many new independent, sustainably focused brands have also come to the forefront, as their innovative approaches to retailing captivate consumers, and we can learn from these exciting businesses paving the future of retail.
I hope our continued engagement will inspire the community surrounding the King’s and Fulham Road with our ever-evolving retail and dining offer. Sloane Stanley’s established retail approach and use of flexible leases has been hugely beneficial, and we will continue to push these boundaries in 2022.
Managing director, Tilstone Partners
The cost of debt and anticipated inflation are likely to have an ever-increasing influence on the UK commercial property market.
Debt levels are likely to rise from the prevailing 0.25% BoE base rate, but maybe not as far as anticipated. At or around 1%-plus, lending margin remains historically low and will not have a negative impact on real estate transaction volumes or prevailing prices.
Any perceived risk of rising inflation will focus investors on rental growth fundamentals. Sectors such as warehouse/industrial will remain popular as the affordability of prevailing rents will be seen as a hedge against inflation.
Perhaps other sectors such as secondary retail will fare less well. In the warehouse sector, occupational demand will outstrip the available supply, leading to further rental growth over and above the 2.7% consensus forecast.
Chief executive, First Property Group
I hope 2022 will see a return to something approaching ‘normality’. Omicron is spreading like wildfire, but if it does not cause serious illness, it should usher in the end of the pandemic. This would spur confidence in occupational demand.
As we were beginning to see in late 2021, once danger is averted, people will return to offices, shops and restaurants. Simple things once regarded as the ‘old normal’ will return and bring exciting new investment opportunities, deliver a level of certainty to tenants and create occupational demand. All these factors have been missing from the market during the pandemic. Their return will be welcome.
Continue to part 39 here
Predictions for 2022: Brace yourself…
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Predictions for 2022: Brace yourself (part thirty-eight)
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