Happy new year. We may only be a week in but already many of those end-of-2016 predictions for 2017 are coming to pass. Don’t believe all the talk of uncertainty, this year is already panning out predictably.
OK, that’s a little flippant, but it is underscored by a serious point. It would be easy to get derailed by macro question marks, yet in so many respects there is certainty. I made 11 predictions for 2017 at the tail end of 2016. I won’t wait until the end of 2017 to test them. Many already stand up.
So what were they? Well, “Property,” I wrote in our pre-Christmas edition, “will start to take tech seriously.” CBRE this week put its money where its mouth is, buying Floored, a commercial real estate software company that produces interactive 3D graphics.
Next was: “Regional real estate markets have grounds for optimism in 2017.” Bar group Dirty Martini announced its imminent arrival in Manchester this week, while data from Savills showed strong performances from Essex (where investment volumes are likely to have trebled in 2016) to Cardiff (where office market take-up last year is expected to reach a 15-year high). There is enough of a pipeline in each market to suggest these strong performances will be repeated in 2017.
How about PRS pipelines moving forward at pace? Well I did say wait for the yet-to-arrive housing white paper, which is already proving a source of controversy in these early days of 2017: this week brought warnings that asking rural Conservative councils to accelerate planning permissions for housing is “like putting 20,000 volts through a small hamster”.
But in urban areas the pace is being stepped up. In Croydon, south London, the Westfield/Hammerson joint venture which is undertaking the redevelopment of the Whitgift shopping centre has now proposed a total of between 626 and 967 homes for rent. That’s up from the 620 units previously planned.
And in Stratford, E20, Westfield again has gained planning approval from the London Legacy Development Corporation for an extension to its shopping centre, along with more than 1,000 homes.
To another prediction: “Inter-agency M&A will become more prevalent.” Tick: this week Colliers International acquired European hospitality asset management company Vision Asset Management.
And as for occupiers being the true determiner of real estate success in 2017? Well, in industrial (still most commentators’ favourite mainstream sector pick for 2017) there has been good news already: power tool provider Industrial Tool Supplies is to take 152,000 sq ft at the Harlow Logistics Hub in Essex, while fragrance and flavour ingredient supplier Treatt has agreed a deal for a new 200,000 sq ft headquarters in Bury St Edmunds in Suffolk. Plenty more evidence will be needed here, admittedly, before we can be confident about that one.
As for my other predictions, I’ll plead that none have been unproven, only that it is too early to test some: that we should not be so shockable in 2017 (about which I suspect I will be proved wrong, given the week’s ambassadorial writhing); that flat will be the new growth (which still feels a safe bet); that elections in Europe may rock the continent and enhance the UK’s safe haven status despite uncertainty before and after the triggering of Article 50 (I’m still confident there); and that Trumpenomics may cause investors to cool on the US (we’ll see, but keeping tweeting, Donald, keep tweeting).
So focus on the foreseeable, of which there is much, and let all that isn’t run its course.
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