Market drivers and impacts Market driver
Impact
Technology
ӱ Remote working, flexible working and reduced business travel are facilitated by the advancement of online communications platforms. Although accelerated by the pandemic, these working patterns will continue in some form of hybrid model. ӱ The Government’s agenda to ban sales of new combustion engines by 2030 will shape requirements for electric vehicle charging where we live, work and shop, with implications for buildings, power supply and parking arrangements. A longer- term consideration is the rollout of the 5G network, enabling driverless vehicles. ӱ There is a heightened need for data storage and datacentres. Big Data, Artificial Intelligence, Machine Learning and Cloud Computing are shaping the future of the workforce and the requirements for buildings in which they operate. Bolstering cyber security and secure data storage is high on corporate agendas. ӱ For retailers, investment in online platforms and fulfilment is paramount. The proportion of online spending is unlikely to revert to pre-pandemic levels. Longer-term, the increased use of robotics, electric industrial vehicles and drones has the potential to impact the way online orders are fulfilled and industrial property is occupied. ӱ Sustainability is becoming widely and fully embedded into Government and corporate agendas. ӱ TCFD is promoting the improvement and increased reporting of climate-related financial information and enabling progress to be measured against science- based targets. ӱ The social and human cost of achieving success is increasingly considered. Society is holding Government and corporations accountable for the wider impact of investment decisions. ӱ It is fully recognised that there are heightened costs associated with owning and occupying non-energy efficient buildings and there is a price premium on those which meet modern requirements. ӱ Occupiers are increasingly considering employee wellbeing when selecting work space. Natural light, biophilia, fitness facilities and other occupier amenities all provide a competitive edge.
The technology trends set to directly impact the property sector in the short to medium-term are wide ranging, from smart building technology, the 5G network, increased adoption of electric vehicles, Artificial Intelligence, robotics, Big Data and Cloud Computing. Competitiveness in a post-pandemic world will depend on a company’s ability to thrive in the digital environment. The use of analytics to make data-backed decisions provides confidence to investors. Property sectors are all uniquely impacted by technological advances in multiple areas, with each facing its own benefits and challenges.
Environmental and social responsibility
During lockdown there has been increased reflection and environmental awareness, with particular focus on climate change. The year could be seen as the tipping point for organisations embedding climate risk into corporate strategy and considering the impacts of climate change on investments. The Government has declared a target of bringing all UK greenhouse gas emissions to net zero by 2050. With the pandemic amplifying social injustices and inequalities, societal value has also moved up the corporate agenda. There is recognition that we need to transition to a fairer and greener economy.
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