Mixed-use and ESG critical to post-pandemic investment

May 6, 2021

Some trends are here to stay – and property’s movers and shakers are taking note.

As people return to the city after the pandemic, there will be more of a focus on places and an emphasis on the quality of buildings. And mixed-use and sustainable developments are two connected trends that
will attract capital in future.

“The urban restructuring theme is very strong and mixed-use is preferred, no one wants 100% offices,” says Thomas Beyerle, managing director & head of research at Catella Property Valuation. “There’s huge demand for urban living from an investment point of view and city density will increase dramatically.”

“Placemaking is a real focus now,” agrees Zoe Ellis-Moore, founder & CEO of consultant Spaces to Places. “But to create a place you need to understand the area’s economy and its people, you need to bring together local eco-systems and have a partnership approach. Gone are the days of the top-down approach, when you created an iconic building and moved on. Now you need to engage with the grass roots.”

‘Gone are the days of the top-down approach, when you created an iconic building and moved on. Now you need to engage with the grass roots.’

Zoe Ellis-Moore, Spaces to Places

Finding the right mix is crucial to the success of new mixed-use schemes, which will create new clusters within cities. “Cities will remain the drivers of innovation and economic growth,” says Herman Kok, head of research at Mark Capital Management. “People need to congregate and create clusters, which is why workers are counting the days until they go back to the office to create, brainstorm and innovate.”

Sustainability is now a must, adds Kok, driven by legislation and increasingly demanded by landlords and occupiers. “Both tenants and investors want state-of-the-art assets. It’s easy to create sustainable new buildings, but the problem is existing buildings,” he says.

Creating new mixed-use buildings and urban hubs will require the repurposing and repositioning of standing assets.

“ESG is like the internet, it is here to stay and it’s a great opportunity,” says Tobias Schultheiß, managing partner of Blackbird Real Estate. “But it’s difficult for private small investors, who are the majority in Germany, to know what to do. Unlike institutional investors, they don’t have consultants and lawyers telling them what needs to be done.”

To bridge this knowledge gap Blackbird Real Estate has compiled a checklist aimed at non-professional owners of real estate, so they have the relevant information and understand the requirements and legal obligations and can turn the ESG challenge into an opportunity.