Perspectives Predictions: Environment centre stage in 2022
Although we welcomed in 2022 in a more muted fashion than previous years (not least because London’s traditional street celebrations were cancelled for the second year in a row) the P-THREE team is confident that this year promises some exciting times ahead in the property sphere. We’ve presented a few of our choicest reckonings on how the market will shape up in 2022 below, accompanied by our regular caveat that these are predictions and not projections! We’ll be following up on many of the themes in forthcoming Perspectives, so check back here regularly. In the meantime, your feedback on all/any of our predictions is most welcome; do feel free to contact us at hello@p-three.co.uk or call us on 020 7101 3151.
…as consumers demand more convenience and entertainment, this is the moment traditional shopping centres will pivot towards a new purpose. That purpose will be based on the particular needs of individual centres and their localities – a cookie cutter approach definitely will not work….
Before we look ahead to the coming months, we will take a quick glance back at our predictions for 2021. We’re a modest bunch, so we will just quietly note that all of our suggestions proved to be on or close to the mark. You can view the full list here, but we were particularly gratified to see that our thoughts on new leasing models, polycentric shift and al fresco dining proved to be spot on. Even our non property-related punt on the popularity of British fizz was uncannily prescient: in June, Waitrose reported that year-on-year sales of British sparkling wine were up 52%! Will we score as highly again in 2022? Here are our predictions for the year ahead:
Justin:
A ‘look in the mirror’ moment – after the past two years, which have given the property sector plenty of time for reflection, companies will shift to find a better balance between profit and corporate purpose, as the agenda shifts to focus on social and environmental impact. With this will come demand for evidence of substantive corporate change as opposed to inactive rhetoric.
Generational change in retail ownership – the seeds for this were sown in 2021 so we expect a lot of activity this year. It is a long time since the field has been stacked with so many new players. The simultaneous challenge and opportunity is turning game plans into points in terms of real change on the ground.
Thomas:
Genuine innovation in leisure concepts – some of the sticking plaster space fillers (in particular, some of the generic competitive socialising venues) that have characterised the past couple of years, and which have no long term future, will be replaced by impressive new concepts with an increased focus on differentiation, including new (and often IP backed) variations on the competitive socialising theme. We also think immersive art will continue to be a huge trend.
Rental growth for the very best locations – we are sticking our necks out here, but we believe rental polarisation is inevitable this year, as prime properties become increasingly sought after, with a corresponding move in the opposite direction for secondary locations. It will very much be a case of ‘mind the gap’.
Hannah:
Shopping centre to multi centre – as consumers demand more convenience and entertainment, this is the moment traditional shopping centres will pivot towards a new purpose. That purpose will be based on the particular needs of individual centres and their localities – a cookie cutter approach definitely will not work.
Resale rather than recycle – environmentally-conscious consumers (an increasingly large proportion of total shoppers) are looking to recycle garments wherever possible. While dedicated apps were quick to tap into this demand, 2022 is likely to see bricks and mortar retailers joining the likes of Harvey Nichols and Urban Outfitters in offering dedicated resale platforms.
Kate:
No longer cooking on gas – the F&B sector has been aware for some time that its love affair with natural gas in the kitchen (beloved by chefs for its instantaneous precision) will have to come to an end, as part of the wider move away from carbon energy sources and net zero ambitions. 2022 will likely see a significant shift in kitchens towards cooking with electricity.
Return of the ‘classics’ – a pre-Covid influencer-fuelled obsession with the latest, trendiest, most sparkly dining venues appears to be on the way out. After nearly two years of pandemic-related restrictions, diners are beginning to tire of ‘novelty acts.’ So, this year more established venues, which offer good value and the guarantee of table, will return to prominence.
Michaella:
Digital connectivity boost – one of the many things Covid has done is to shine a stark light on some of the major holes in the provision of connected buildings and communities. As seamless digital connectivity is now considered essential, rather than optional, expect investors and occupiers alike to jointly push for swift in-filling of digital gaps and a ‘baked in’ philosophy on refurbishment/redevelopment schemes.
Reactive transformation – 2022 is likely to see the breakthrough into the mainstream of one of more embryonic technological disciplines, spurred on by the challenges of the past two years. Robotics, already a reality in manufacturing industries, is likely to become embedded in various sectors – however the key will be to find real efficiencies and not just novelty value use.
And finally... our annual non property-related prediction (courtesy of Justin): * unnatural shifts in nature *– we foresee more reports of the natural world moving out of kilter (such as the lack of butterflies, acorns and apples recorded in 2021). Of course many in the property sector (and other industries) are already doing their bit for the environment, but we believe the firm reality of changes in our own eco-systems will inspire us to work harder to protect and enhance the natural world we all depend on.
Article by P-THREE
