Real change for the UK real estate sector

The Covid-19 crisis may have dented the confidence of UK real estate market participants, but by far their most pressing concern currently, is the strength – or otherwise – of the UK economy.

That's according to new research by law firm Fieldfisher, which quizzed 500 of its real estate, construction and planning sector clients to get an insight into the state of the property market at the start of 2021. And the general consensus is that the market is bracing for a major overhaul of its traditional revenue generation model and operating structures.

"It is clear from the responses we received that the UK real estate sector is preparing for new ways of generating, collecting and deploying income," says Cecily Davis, construction and projects partner at Fieldfisher. "2021 promises to be a very interesting year for the real estate and construction industries."

A new survey by Gerald Eve meanwhile, suggests that the expected recovery in the central London office market will be led by law firms and non-traditional office sectors, including medical, education, and life sciences. The legal sector accounted for 14 per cent of total take-up last year, much higher than the average 6 per cent in a typical year between 2011-2015.

Residential property too, performed well in 2020, with total investment hitting GBP6.1 billion, equaling 2018's all-time high, according to new research by Colliers. London again proved a big draw with the capital attracting GBP2.8 billion of that total.

And there are signs of recovery in the retail sector too – or sections of it least – says Scarborough Development Group, which says that while city centre shopping has had a torrid time and may continue to struggle, out of town retail parks are seeing something of a renaissance. More spacious stores, better suited to social-distancing, ample free parking, and a prevalence of discount retailers, many of which are classed as essential and have remained open during lockdown, have all boosted the appeal.

"We expect out of town locations to remain popular once social distancing restrictions come to an end, particularly as shoppers continue to favour value as the economy recovers," says Jack Abou-Jaoude, Development Executive at SDG.

We also report on a host of proptech-related stories this week, with news of new software apps from Legislate Technologies, ARTHUR, and Spike Global, providing solutions for landlord-tenant contracts, property portfolio management, and tenant engagement and property operation. And staying with the proptech theme, we have news of the acquisition of Rise Buildings by commercial real estate leasing, marketing, and asset management technology VYTS. Rise is a property operations and tenant experience technology company used by landlords including Blackstone, Hines, and CIM Group.

And finally, Hugh Leask, writing for our sister title Hedgeweek, reports on how an independent audit by King's College London has concluded that credit hedge fund Cheyne Capital's social impact real estate fund has made a "real impact on individual lives".

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