After two years of unprecedented challenges faced by real estate, experts share their predictions for 2022.
Sales & marketing director, Triptych Bankside
Whilst we hope Covid-19 will be gone by the end of 2022, it’s more likely that we will have learnt to live with it. This will impact on changing attitudes in new build residential schemes. For example, wider public realm for social distancing, more ventilation into buildings, facilities for hybrid work patterns and more lifestyles facilities for healthier living. These elements and more are already incorporated into Triptych Bankside, one of the most striking developments on the central London’s skyline.
Partner, Horwich Farrelly
Working within property litigation, it will be interesting to see what the ramifications of the government’s commercial rent (Coronavirus) bill will be in 2022 as we’re only starting to see how this is being used in disputes. 2021 showed how resilient we are as a nation and this will continue into 2022. The mandatory changes imposed during a series of lockdowns last year highlighted how flexible the office and retail market can be. We will need to continue this adaptability to achieve success in 2022 with the pandemic being far from over.
Co-founder, LEXI Finance
The threat of more lockdowns, the general acceptance of working from home, and the rise of e-commerce means the darling of 2021 – logistics – will continue to benefit in 2022. Whilst great for logistics, the high street will continue to suffer as retail goes through a structural readjustment, which should create opportunities. Given bond yields remain unappealing to long term investors, commercial real estate will continue to be an attractive source of fixed income and this will likely drive margin suppression. This could continue the trend of capital inflows to prime UK assets and see UK debt-funds further pushed into alternative assets and European markets. Supply chain issues and inflation are looking less ‘transitory’, meaning there will continue to be heightened lender scrutiny of contractor strength and construction methods in the development space. We will see new lenders come to market, especially in the bridging, mezzanine and equity spaces.
Director, Woolbro Group
After enduring a frenzied year of demand sparked by the stamp duty holiday, it’s unlikely the residential sector will have to contend with anything as frantic over the coming 12 months. However, developers must use this forthcoming lull to pile pressure on Michael Gove to come up trumps on planning reform. Though his predecessor’s proposals failed to tackle the core of the issue – that being the over-politicisation of the planning process at a local level – the Planning for The Future whitepaper was a still welcome step forward. Sadly, the sector has, by and large, come to terms with the high probability that the former housing secretary’s ‘once-in-a-generation’ blueprint for reform is set to be watered down beyond recognition by his successor. And if the extent to which the Conservatives were spooked by the Amersham by-election is anything to go by, then it looks even less unlikely that 2022 will deliver anything close to the radical reform Robert Jenrick was dead-set on pursuing only a few months ago. But while this looming U-turn will be at complete odds with the traditional Tory value of boosting homeownership, it will certainly keep anti-development constituents and planning committees in the party’s southern strongholds happy!
Founder & CEO, ility
Flexibility, profitability and sustainability – that’s my hope for 2022. The ‘new normal’ is a term floating around at the moment. To me, ‘new normal’ means that there will be some semblance of predictability about what is happening and what is going to happen. For now, I predict that asset owners will realise that building the capability to respond to this ‘new normal’ is more important than building any software or buying any platform. This will mean acknowledging that the community they have built isn’t just about rent, but is a great opportunity to create service revenue the same way that technology companies who have built their communities learnt how to monetise what they had built. So, to put it succinctly, I predict that real estate will learn to embrace digitisation as both essential and necessary for flexibility, profitability and sustainability.
At present the property industry is laser focused on becoming consumer-led. In doing so, the use of technology will be critical in meeting user-expectations towards speed, transparency and efficiency. It seems logical to predict that proptech will continue to mature and provide the foundation for the built environment to become more flexible and accessible to end users. Doing so, technology will serve to remove the unnecessary processes and the interminable negotiation that has dominated real estate transactions. We see a future where the leasing process is expedited by digital solutions and the time and resources required to complete a transaction are reduced. Providing that high levels of momentum are sustained, proptech will enable the industry to digitise and commoditise. As a result, I would expect to see the demise of archaic legal processes in place of innovative solutions.
Director, Jestico + Whiles
We head into 2022 in a blaze of optimism that we will defy this latest Covid wave to extinguish.
Q4 21 saw a flurry of enquiries that moved quickly to fruition with new appointments, and we left 2021 (with no regrets) looking forward to a dynamic and vibrant Q1 2022. Even our hardest hit sector, hospitality, is seeing a bounce back as clients see a distant glimmer of light and are using the once in a lifetime opportunity ‘recovery time’ to totally reimagine their hotels through major refurbishments. I should add the hotels are not being reimagined as post-covid sanitoria, but as optimistic escapes! We continue to see the line between residential and hotels merge through co-living, student and BTR, in a most exciting way. This, coupled with the new typology of blended-use schemes that continues to gain momentum, is on a new and exciting trajectory to create entirely new ways of living. This has not been created by the pandemic but has certainly been accelerated and amplified by it. So, some embers of creativity have been left by Covid for us to fan into life.
Head of networks, Built by Nature
Reflecting on the past year, we have seen whole-lifecycle frameworks become more prominent in discussions with our partners, and we expect the role of embodied carbon to become part of the mainstream conversation in 2022. Low-carbon materials need to be leveraged now to develop our future building stock. With this in mind, market-ready solutions, such as mass engineered timber, are key to keeping the impact low from the start of a project. In 2022, Built by Nature’s accelerator fund and knowledge-sharing network will focus on expanding into the areas of technological innovation, finance mindset-shifts and city-scale pilots to expand this space. A great example set to be published early next year is the New Model Building, a pre-warrantied, open-source system for a UK multi-storey residential building. There are more of these to come as the year progresses and we look forward to the next round of funding announcements in Q1 2022.
Predictions for 2022: Brace yourself…
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Predictions for 2022: Brace yourself (part forty-five)