The real estate industry has experienced a major upheaval due to the pandemic. Many regions closed their borders and due to several national or regional lockdowns, businesses and offices were forced to close. Commercial real estate (CRE) was hit hard. Landlords and property owners were forced to find new ways to get tenants and reassess their lease structures and adapt them to the times.
As lockdowns ease and borders begin to open up again, we’re seeing a slow return of the workforce to their old office buildings. Businesses are starting to reopen and it looks as if things have settled in with the new normal. In a post-COVID-19 world, many tenants are purchasing office spaces in order to make fit-outs that will make these spaces safer, more flexible, and more conducive to productivity and efficiency for employees.
How does the pandemic continue to shape the face of CRE in the country? What changes can we expect to see in 2022? We’re sharing some of the key trends that will redefine the use of the commercial property and commercial real estate in general in 2022.
5 Changes that Will Shape the Use of Commercial Real Estate
1. More demand for smart buildings
Smart buildings, which are buildings equipped with a network of sensors, microchips, and more, are becoming a norm because of the need to promote better health, comfort, and efficiency for tenants.
The increased demand for smart buildings is also fuelled in part by factors such as the rise in demand for task automation, companies reassessing their operations in the wake of the pandemic, and the need to meet sustainability initiatives. Other factors contributing to the smart building market growth include:
- Better tenant management systems
- Lower operating costs
- Enhanced Building Management Systems (BMS)
- Enhanced security management
Source: i-scoop.eu https://www.i-scoop.eu/building-management-building-management-systems-bms/smart-buildings-holistic-beyond-technologies/
2. Large corporations are opting to buy
Flexible and hybrid working schemes have become the new normal in 2020 and 2021. While many have worked from their homes or from any other location, offices continue to be a staple, albeit with refurbishments and a new purpose.
Today’s office isn’t just a place where people come to work from nine to five. It has become a place that’s been redesigned to promote employees’ health and well-being. The office has also become a central venue for collaboration, creativity, and innovation.
As such, many large corporations, such as Google, Castleforge, ITV, Apple and Facebook have acquired buildings in London and other UK cities to further in-person collaboration and connection. Furthermore, many companies are looking to provide their employees with better work environments in preparation for en masse returns to the office. By consolidating their commercial footprint high cap companies aim to strengthen their workforce and maximise workspace utility.
Many large corporations, such as Google, Castleforge, ITV, Apple and Facebook have acquired buildings in London
3. Accelerating the shift towards ESG
Environmental, social and corporate governance (ESG) isn’t just a buzzword—it’s become a major component in commercial real estate and in tenants’ and investors’ decision-making process. The need for ESG is fuelled in part by the growing interest in investing in clean energy infrastructure, global initiatives for sustainability and green leases.
ESG-compliant buildings help lower maintenance costs and emissions and they’re also more resilient to the effects of climate change. Moreover, such buildings provide better standards and can meet minimum productivity thresholds when it comes to key workspace requirements, like lighting and indoor air quality (carbon dioxide levels and temperature).
By adopting ESG standards, landlords can help promote the health, well-being, and productivity of their tenants. They’ll also be able to support sustainability while enjoying savings on maintenance and operation costs.
ESG is here to stay and it will definitely play a bigger role in the future of the real estate.
4. Shorter, more flexible leases
There’s a rising demand for flexibility in office and retail spaces. Moreover, the advent of hybrid working setups has prompted many tenants to seek out flexible, short-term leases. The growth of SMEs has paved the way for flexible or non-traditional leases. This growth is due in part to the need to stay agile and quickly adapt to changing employee needs and business practices. Other growth drivers include the rise of small-and-medium-sized businesses and the need for cost-efficiency.
The concept of what a modern office should be has experienced accelerated change. There’s an increasing demand for flexible office space in commercial real estate as we move into a post-pandemic world. We’ve since learned to adapt to these changes and have come up with innovative solutions, such as smart buildings and flexible office spaces that promote employees’ health and well-being. ESG will continue to shape buildings and investment directions whilst investors and landlords that leverage virtual reality technology and virtual tours software will hold a competitive advantage in ensuring occupancy within their portfolios.
5. Rise of 3D virtual tours to show spaces
Virtual reality and augmented reality are increasingly being used in an array of industries like healthcare, entertainment, education, tourism and digital marketing. These technologies are also starting to make waves in the real estate industry and are being used to deliver better customer experience, augment the design process and offer improved visualisation of 2D plans.
Virtual reality, for example, enables developers and brokers to offer more interactive and engaging content through VR tours and virtual staging. Developers, designers and brokers can gain a more intimate understanding of the space, paving the way for more effective design choices and improved construction efficiency.
Virtual tours software like revvis allows users to customise a space to meet their or their client’s needs and requirements. Its real-time rendering capabilities allow you to see results instantly. It also lets you have full control over the virtual space and how you go about your personalised tour. Experiment with different interior or exterior setups and materials, furnishings, colour schemes, and more. The application of this software is particularly powerful when showcasing new buildings as developers can begin marketing any property to potential investors or occupiers from the earliest stages of construction.
To learn more about how interactive 3D virtual tours are re-shaping how landlords and agents connect with occupiers reach out directly to the revvis team.