After two years of unprecedented challenges faced by real estate, experts share their predictions for 2022.
Managing director, FuturePlaces
The concept of sustainable, walkable neighbourhoods has become more widely accepted in the last year. In 2022, we must go further in adapting the tested neighbourhood delivery model to unlock the best outcomes for communities. We must engage stakeholders with a longer-term interest in a place, by funding infrastructure and place making works – ahead of housing delivery – with longer-term patient capital. This is the only way to address all areas of the UK to deliver high quality, sustainable, vibrant and healthy places and access to affordable homes. As BCP Council’s recently launched placemaking company, FuturePlaces are one of the first across the country to adopt a stewardship-led approach to regeneration on behalf of a local authority. In line with the government’s levelling up agenda, we hope more local authorities take up the mantel to fundamentally address challenges with stalled regeneration sites and proposals that often fail to translate community and stakeholder ambitions through whole place development.
Director, Edwards & Co
As we head into 2022 on the back of the recent resurgence in the Covid infection rate, many companies are now once again working from home, which for an office agent isn’t the greatest of news to hear. Manchester is a resilient city and I have no doubt it will bounce back quickly. We have seen throughout 2021 with the slow return to the office a big shift towards ‘plug and play’ office space as companies simply don’t want the expense and hassle of undertaking an office fit-out, we expect this to continue and evolve in 2022. In our great city of Manchester, we have a growing skills base driven by graduate talent resulting in a huge employment market. This, coupled with the great places to live, both in the city and the wider area will continue to act as a big pull for businesses, very much like 2021. Come on everyone – working from home has a place, but how can you truly mentor people, train people, socially interact and collaborate? You can’t!
Head of hotel finance, Leumi UK
For an asset class that has endured significant challenges over the last two years, the hotels sector has also seen a remarkable recovery. My hope for 2022 is that this recovery continues - but this will only be possible by continuing to adapt. Strategic pivots by those working in the most affected hotel types, such as prime city centre locations, will allow smart operators to capture new business. Larger firms will continue to be hesitant to encourage business travel, creating an opportunity to attract SMEs - which smart operators are already doing. Less directly affected assets, such as well-connected regional hotels should, according to current trajectories, reach pre-Covid RevPAR by the end of 2022. So, the sector’s recovery will be steady, if varied, relying on the already successful vaccination programme and repositioning to make a recovery close to 2019 levels by the end of the year.
CEO, Ecotek Homes
Labour and material shortages have yet again impacted the government’s ambition to deliver 300,000 new homes a year. While I believe there will be a commodity correction in 2022 this continued lack of housing supply has a compounding effect making homes less affordable. To solve the housing crisis Britain must adopt more off-site manufacturing technology. In 2022, we will welcome the government’s carbon emission reductions through a tightening of building regulations through the Future Homes Standard, followed by new performance measures for residential energy performance certificates which will help the sector make progress on the government’s carbon reduction commitments. Towns and cities across the North, Midlands and South West are in dire need of inward investment and connectivity. In 2022, we believe there is an opportunity to level up these areas by increasing private sector investment into high-quality new homes which can drive economic growth and create attractive neighbourhoods.
Leader, Swansea Council
2022 will be the year we prove community-focused regeneration is what will save our town and city centres. That is what is underpinning the £135m first phase of the Copr Bay development, which is nearing completion and will kick-start the wider £1bn, Council-led transformation of the city centre. The days of identikit high streets are over. As with the regeneration of Swansea, which is anchored by a major new live performance venue and in which we’re prioritising local businesses and attractive public realm, I’d like to see even more cities invest in the spaces and venues that will serve local needs whilst attracting both people and spend to the city. I hope 2022 will see more public and private sector landlords nurture independent businesses to take the big commercial decisions to invest in bricks-and-mortar, creating exciting destination retail and F&B.
Chief economist, Leading Real Estate Companies of the World
First of all, the pandemic is not over for the globe. Life has returned to some version of normal in the US. The UK economy will return to pre-pandemic levels by the end of the year, with growth of 6.5%, while the likes of Germany and China forecast growth of 2.6% and 7.8% respectively – it varies significantly across the world. Even though housing markets worldwide have done well, when you look at economic activity on the ground, it is an uneven recovery. Different economies are improving at different rates, and I expect that will be the case for the next year. I expect interest rate differentials among central banks will be driving big movements in currency markets. We will also see unevenness in economic recovery, particularly if you look at the pace of vaccination, which has slowed in some countries but picked up in others. 2022 will be a year of catch-up, with six months of divergence, followed by convergence. Supply chains will start returning to normal, which will fuel the recovery in new home building. Given the strength of demand for housing, this should help take pressure off prices, so we should see improvements in affordability overall.
CEO, Boutique Workplace Company
As we move forward, we’ll be designing workspaces to suit a post-pandemic world. We are likely to see less big footprints in buildings. Offices will need good break-out spaces and will need to say away from creating massive hustle and bustle. There should be a community, but people want the option to take it or leave it depending on where they are at that moment in time. Much smaller businesses are well placed for a flexible and hybrid future. They are much quicker to embrace the change and I think workspaces tailored for small businesses will see success this year.
Predictions for 2022: Brace yourself…
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Predictions for 2022: Brace yourself (part forty-seven)