Land & Development Market Review | Autumn/Winter 2020
"The Covid-19 pandemic has led many sectors to reconsider their real estate requirements and assets - from office, to student, to tourism and leisure there is currently a widespread review of strategy ongoing. In the short term, we are already seeing opportunities coming to the market as result of the pandemic, which is creating an active residential development market.”
Sandy Gilmour, Associate Director of Land & Development, Rettie & Co.
- Covid-19 has brought fundamental changes to the real estate sector in terms of demand and use classes
- The residential sector is well positioned to absorb changing demand in office and retail sectors
- Confidence in the residential sector remains high with applications remaining strong, and scheme delays and abandonment remain low
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A Developing Market
Perhaps the sector which is likely to see the greatest upheaval and change as a result of the Covid-19 pandemic will be the real estate investment and development sector as trends in space use and land requirements, which had slowly been changing, will be fast forwarded. Across almost all use classes there is a process of review and restructuring of requirements and long-term strategy. This is true for use requirements but also for investment. As shopping has moved online and work and education have become more remote, retail, office and student accommodation are all sectors which look set for major upheavals as the market moves into the future. For the residential sector, these shifts are already opening up new opportunities, for example, student schemes are now being re-envisioned as BTR developments as a result of saturation in the student sector in some markets and weakening future demand from institutions.
While the decline of the high street has long been heralded, the shift to online retail and home delivery services looks set to have a lasting impact on consumer behaviour, readjusting demand for retail space in prime central locations. This trend of quickening change is also being mirrored in the rise of home working, with many companies, being led by the tech sector, stating that they plan to move to home working indefinitely. The implication for office demand is one that may see the speeding up of the hub and spoke trend and the concept of distributed urbanisation and remote working hubs in suburban locations. Demand is also likely to concentrate in prime high-tech office spaces with lower quality space becoming redundant.
These combined trends look set to open up opportunities for residential and mixed-use development within urban and suburban markets. Both Edinburgh and Glasgow Councils already have policies which have been reshaping City Centre uses with the aims of diversifying core locations and introducing residential use back into the heart of the city. These trends, which had slowly been influencing the real estate landscape, now look set to stay and the strategic market may provide opportunity as social and work patterns change.
Off Market Opportunities
We have numerous off-market opportunities including residential development land, office and industrial investments and hotels/ guest houses. Please contact a member of our team to discuss further.
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