MIPIM UK took place last week at Old Billingsgate, revealing the biggest themes from the real estate industry from the past few months and predicting what we can expect from the sector within the next year.
The two-day event began with Esther McVey’s keynote speech on the UK needing to build 300,000 homes per year by mid-2020’s to help end the housing crisis – a target which, according to The Times, is almost double the amount of new homes built in 2018. McVey continued her keynote speech by outlining her plans to create a planning “A team” to achieve the ambitious target. The A team of specialist planners will help councils accelerate the progress on projects with their specialist skills and technical know-how, which should help move on the progress with struggling schemes.
The housing minister also stated that within the next 10 years, the UK should aim to become the world leader in modular construction. She acknowledged its benefits of it being “less inconvenient and noisy for local residents” as well as providing “more certainty during construction”. Its advantages seem to be recognised globally as this modern method of construction is being embraced in many countries. In Japan, Sekisui House, built 43,735 modular homes in 2018 and Sweden built just under half of its homes off-site. By comparison, the UK currently builds around 15,000 modular homes per year, and the government will therefore need to commit to the modern method of construction if it is serious about becoming a world leader.
The inevitable topic of Brexit was also touched upon, Dr Nicole Lux mentioned that German banks are withholding investment from the UK due to the uncertainty in the economy. German banks are one of the UK’s biggest lenders for new commercial property opportunities, this could therefore pose a problem of raising capital for new development. However, Erik Sonden, Senior Advisier at DTZ, framed this uncertainty as a “short term transition period”, and explained that London has little to worry about as its grandeur and strong position as an investment market are enough to retain investors.
As the day progressed towards industry trends, it’s no surprise that traditional commercial office space was said to be a thing of the past. With more and more companies moving toward co-working spaces, serviced offices and/or agile working policies, all of which take into consideration the well-being of employees. Juliette Morgan, Head of Campus at British Land, attributed the future of the office space to hospitality, highlighting that landlords need to continue to treat occupiers as consumers rather than just tenants, through areas that stimulate employees rather than just a “sea of white desks”. Juliette finished by summarising the next big trends in the industry including zones that block Wi-Fi and have spaces for education, pointing to the fact that consumers’ needs in the workplace are changing and offices are no longer about just place but quality.
This is the same in the retail sector. Despite the reported decrease in consumer confidence, Ben Rogers, Director at Centre for London, provided an interesting insight, stating that “Retail is not dying – bad retail is dying”. In order for the physical retail environment to compete with the online world, stores need to provide consumers with an experience, rather than the usual monotonous store visit. Through delivering a unique offering, this point of difference should generate more customer loyalty, helping brands stay competitive.
With design now being centred around the people that inhabit the place rather than just the space, the future of the built environment looks more promising than ever to deliver more user orientated places. We look forward to seeing how these themes will develop when we all meet again at MIPIM Cannes 2020.