2022

Forecast

UNITED KINGDOM

Our 2022 Forecast report series provides perspective on how global events, trends and indicators impact commercial real estate in a variety of sectors across the UK.

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Opportunities to retrofit much of the built environment, forward-thinking investments and sustainable building techniques are all part of the decarbonisation of real estate which is an essential focus for 2022.

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As the economy hopefully pulls clear of the pandemic and sees a further release of pent-up demand, 2022 will be a year of recovery.

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While inflation is set to peak in the first half of 2022, the medium-term inflationary landscape has shifted.

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While hybrid working is here to stay, the office remains an integral part of business, and there has never been a greater focus on how to optimise it for employees.

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The pandemic has driven an increase in demand for flexible solutions and minimisation of capital expenditure, subsequently sparking a rise in the number of short-term leases and management agreements.

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The unique factors of Brexit and Covid-19 have led to a ‘perfect storm’ causing cost of both materials and labour to rise exponentially.

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2022 will continue to see very strong demand for industrial and logistics space as the sector benefits from the fundamental shift in the way we shop, and from constraints in global supply chains.

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While the outlook for retail spending is positive, powered by an accumulation of household savings and an increase in consumer confidence, there is a raft of challenges present across the sector.

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Recovery within the leisure sector will continue as consumers look for enjoyment through experiences in physical locations. Uncertainty remains in some parts though and vacancy rates are forecast to continue to rise during the year.

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One of the most profound changes the pandemic has brought about is a sharpened focus on our health and wellbeing. This is encouraging us to rethink the spaces in which we spend our time, the health of our cities and the sustainability of the built environment.

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Student surveys have painted an encouraging picture of demand for in person learning and we have once again seen an increase in demand for higher education during a time of economic uncertainty.

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On top of the Stamp Duty holiday boost, the impact of the reassessment of housing choices following the pandemic is increasingly apparent. There is still plenty of scope for additional households to take a view as longer-term work arrangements become clearer.

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The government’s flagship ‘levelling up’ policy will be further developed during 2022, after a series of announcements in 2021 geared towards restoring local pride, growing the private sector and improving living standards.

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The strong uptick in the global economy, and the lessons learned in ‘living with Covid’ are driving money into real estate.

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Contact our Research Leaders for more information and insights.