Predicting the future is a thankless task. In 2012, not even the best minds in the world would have been able to predict Donald Trump’s presidency, Brexit or a global pandemic.
Still, in the real estate world, many predictions will have paid off. Those who invested in the industrial market a decade ago have a lot to smile about right now.
So, what could the next 10 years have in store for the property sector? That is the question at the forefront of all our writers’ minds in this edition of Perspectives.
For Phil Westerman, partner and head of real estate at Buzzacott, the industrial sector still has a lot of room to grow – as does the residential sector. As he puts it: “Neither housebuilders nor industrial developers can put up buildings quickly enough right now to meet the sky-high levels of demand.”
Another potential avenue for value could be housing data. As Michael Dent, founder of PropertyData observes, this is something that big real estate investment trusts and large investors have taken advantage of for years. Going forward, however, he believes there is a big opportunity for SME developers to get their hands on the same kind of data. “We’re in a housing crisis, with not enough housing being built,” he says. “So helping investors and developers to deploy capital more effectively and to deliver more units can’t be a bad thing at all. Yes, the big housebuilders help, but don’t forget that SME developers account for a massive amount of volume housebuilding.”
Just as there is an opportunity for SME residential developers, so too is there an opportunity for developers in ‘alternative’ residential sectors. That is the view of Paul Brundell, chief executive of Kosy Living, who sees asset classes such as co-living, student accommodation, build-to-rent and later-living becoming more mainstream in the future. “We may refer to these sectors as ‘alternative’ but in reality, these sectors are becoming more ingrained in the UK market and will continue to do so,” he says.
Finally, there is the world of property management, which Sam Caulton, chief financial officer at Re-Leased, believes is being transformed by technology – largely thanks to Covid. “Since March 2020, technology-based solutions have become a necessity for landlords and managing agents,” he explains.
If Covid does transform the property management sector – or if any of our writers’ other predictions come to pass – the next 10 years could be interesting indeed.
Mitchell Labiak is news and finance editor at Property Week