Three property trends to watch in 2022
As we head into 2022, our highly experienced Godwin Developments team share their thoughts on the trends that will shape the property industry in the year ahead.
What do changes in the housing market, increased demand in e-commerce and a growing need to respond to climate change have in common? Naturally, it’s their impact on the property sector.
The property industry is perhaps the most reflective of what’s going on in the UK today – and can provide a glimpse into what will happen next. With widespread changes to how we live, work and socialise – thanks in part to the legacy of Covid-19 – the property industry is delivering for our changing lifestyles.
To understand what trends will be shaping the industry in the year to come, some of our expert team share their views on what we can expect from the sector in 2022.
EV Charging Forecourts are a thriving opportunity
The recent COP26 summit shone a spotlight on the immediate need for countries around the globe to take action on climate change. One of the goals of the summit was to speed up the switch to electric vehicles. To this end, in the UK the Government has already announced it will ban the sale of new petrol and diesel cars from 2030 and is proposing the provision of electric vehicle chargers as standard in all new build residential and office developments.
Rob Birch, Senior Development Director, describes how these decisions – and the widely-held ambition to build green infrastructure – will directly impact the property industry and drive significant investment in the coming years.
“In the last year, we have started working with several specialist EV charging providers, all of whom are looking to grow their national presence considerably. This should really come as no surprise – with more than 300,000 EVs already on the roads, demand still rising steeply. More than a quarter (26.5%) of the new car market during 2021 has been electrified, while only 26,000 public chargers currently available. With many in the UK having no access to off-street or home charging, there’s a genuine need for EV stations to bolster the national infrastructure and make the widespread adoption of electric vehicles possible.
“We believe EV Charging Forecourts will be a key property investment opportunity in 2022. As well as offering convenient EV charging for communities and commuters, these destinations will capitalise on the growing demand for fast-food and food-to-go retail, by incorporating stores into forecourt developments.”
Demand for industrial and distribution space will continue to rise
Since the outbreak of Covid-19 almost two years ago, and the ensuing restrictions placed upon our daily lives, more people than ever are now choosing to shop online with the percentage of total internet retail sales doubling in just five years. To facilitate this, retailers with an online presence have sought more distribution space to strengthen their delivery networks, especially those who guarantee same, or next day deliveries. Demand for space over the last couple of years has vastly outstripped supply, including for both new build and existing assets.
Andrew Cox, Development Director, Industrial at Godwin Developments, believes this boom will continue during 2022 with e-commerce showing no signs of slowing.
“The UK’s nationwide distribution network has grown significantly. It now includes provision for last mile deliveries, as well as traditional hubs in established locations. Whilst demand for industrial and distribution developments is being driven largely by increases in online retail activity – with e-commerce now accounting for around a quarter of all retail sales in the UK – there are further positive knock on effects within the sector, as suppliers feed into the online supply chain colossus, including packaging and systems manufacturing. We also envisage further change to the distribution network with EV charging and driver welfare facilities becoming more prevalent to meet environmental targets and operating directives.
“Strategic sites suitable for large scale development – close to arterial routes and capable of serving large catchments – will continue to be in high demand. However, the defined need for smaller distribution facilities to service same-day volume and guaranteed next day deliveries will increase further.
“Another sector within the industrial and distribution market which will also gain further traction – and has been somewhat under-provided for over the last five years – are multi-unit builds. These satisfy demand from SMEs that are usually looking to purchase assets rather than lease.
“We’re currently working on development schemes across the Midlands and the North to deliver speculative high-quality industrial and distribution space, ranging in size from circa 2,500 – 250,000 sq. ft. Notwithstanding our current development programme, we continue to search for land and existing property to build our pipeline and with secured funds readily available, we are ideally placed to acquire further sites and assets via outright purchase or on a joint venture basis.”
A fresh take on BTR
The government’s target to build 300,000 new homes a year is a figure that’s more than familiar to the industry. However, following the huge success of the BTR ‘multifamily’ model of apartments in major cities in recent years, there’s now a new offering that is emerging to help tackle the housing shortage, as James Mulcare, Head of Residential Capital Markets, explains.
“There is an increasing number of people of all ages renting today, compared to 10 years ago, a trend driven partly by affordability and partly by choice from a more mobile workforce. In a more customer-led market, residents are looking for a home that meet their needs, is of high quality and increasingly comes with a level of service not previously seen in the private rented sector. As the average age of the average resident rises, so their requirements change, with many – especially young families – looking for more space with houses in the suburbs. This is driving the demand for a new form of rental product – suburban BTR, otherwise known as Single Family Housing (SFH).
“The SFH model in the BTR sector – which still relatively nascent in the UK – will see a rapid acceleration in popularity in 2022. We have already seen huge investments being made in this area and with requirements for family dwellings rising all the time, a significant proportion of the government’s new homes target will no doubt be filled by purpose-built rental properties.”
Diversifying land opportunities
With these trends shaping the property industry well into the New Year and beyond, our Managing Director, Matt Chandler, explains what this means for landowners and investors.
“As a business we are growing our portfolio across the industrial, residential and commercial sectors to satisfy the rise in demand that we’re anticipating over the coming years. This puts us in a position to bring high-quality homes and commercial destinations to communities across the country where these types of developments are needed most.
“Of course, that means our team is constantly on the lookout for suitable sites across the UK. In that sense, we’re in a fantastic position as a very well-funded private business, as we’re able to act swiftly on the right opportunities. As well as helping landowners to realise the value and potential of their land quickly, it also means we can support these sectors experiencing substantial growth to cater to market and investor demand.”
As a leading national property business, Godwin Developments has dedicated teams serving the residential, commercial and industrial sectors. To find out more about our work and keep up-to-date with how we are growing shared prosperity in the UK through property, visit our website, follow us on LinkedIn or subscribe to our newsletter by emailing firstname.lastname@example.org.