Athough there are currently strong structural trends that affect real estate decisions globally – the rising cost of capital, inflation, energy prices and all the implications –it is wise to look at the long-term trends to assess the structural factors that will change the world in the future, said Savills director, world research, Eri Mitsostergiou.
Interviewed at EXPO Real recently, she said that these longer term factors include climate change, social factors, demographics as well as geopolitics. “These are crucial for investment decisions across the world,” she said.
“Remote working is creating a lot of uncertainty in the market and we hear every day of big companies releasing or subletting space.”
But she pointed out that these are just the headlines. “We also have small and medium-sized companies that may behave a bit differently. They may maintain more of their workspace. We also see that people need a lot of co-working and collaborating space when they return to the office so that increases the need for space for people to work together.”
“We are still at a stage where we are trying to balance and understand exactly what people’s needs are and what the factors are that are going to bring them back to the office.”
And there are growth sectors driving demand at the moment, she said, such as the huge demand for logistics space around the world’s logistics hubs. “That has been driving prices and rents.”
But the structural factors and demographic trends that will create demand for new sectors in the future mean that alternative sectors such as care homes/senior housing, student housing and data centres are three examples that come to mind as growth sectors going forward which have already seen an increase in investor demand.