Forget the doomsayers: we are on the verge of a golden age.
Former US vice-president Dan Quayle once said: “The future will be better tomorrow.” Right now, I’m willing to risk the ridicule of using this statement. Although it might not seem like it today, as the fog of this dreadful year starts to lift, we should indeed see a much improved future.
Most of us will not remember this year fondly. Whether it be the virus, the lockdowns, the job losses or the general anxiety of it all, 2020 has been a stinker. However, now we need to focus on what comes next. And it’s easy to paint a negative picture. The virus is firmly with us and scepticism remains over the timing of an effective vaccine.
Even beyond the virus, the economic and human costs will be with us for generations. On the day I am writing this, I was woken by the news that the head of Britain’s armed forces is warning that the fallout from the virus risks another world war. Despite this, I really am optimistic about the future. Indeed, I’ve been telling those close to me that I sense we’re on the verge of a golden age. From equality to technology, the arts to the environment, I see the potential for massive improvements in living standards.
My tendency towards optimism sits well in the real estate industry. With investment time horizons often spanning multiple decades, for most it’s difficult to operate in property if you don’t take the view that at least some parts of the market are on an upward trajectory. Right now those sunny parts of the market are logistics and residential, with prime pricing in some cities reaching record high levels despite the pandemic.
From equality to technology, the arts to the environment, I see the potential for massive improvements in living standards
I see the growth of the residential sector to be one of the most exciting changes in the real estate industry, with potential to be profoundly positive. The huge volumes of institutional capital looking to enter this part of the market, particularly build-to-rent, are likely to increase the delivery of much-needed rental stock, and should also increase the overall quality of stock within the private rented sector.
Having seen my wife suffer the indignity of a rental flat plagued by cockroaches, mice and occasionally birds when she first moved to London, I feel strongly the potential to transform lives for the better.
Even in the less favoured parts of the market, I see grounds for optimism. As I previously argued in this publication, change in retail not only opens up opportunities to deliver huge volumes of housing, but could also result in a far more varied and vibrant retailing environment.
And although there will be less overall demand for office space, central business districts and emerging office locations in big cities are expected to remain a major part of our industry. Not only that, these locations are likely to be further enhanced with greater provision of residential, retail and leisure, and a next generation of office space with a greater focus on creativity and collaboration over routine tasks.
