WHERE THE SAVVY PROPERTY INVESTOR WILL BE PUTTING THEIR MONEY IN 2022

I suspect few will be sad to see the back of 2021, and as we get further into 2022, there is a real sense of optimism that we are finally approaching something which could be termed ‘normal’: by which I mean learning to live with Covid in a manageable way, and also learning to live with the pain of Brexit.

For all its uncertainties, in the commercial property world at least 2021 was a year when deals got done.  The latest EGI index – the leading barometer of commercial property deals, run by industry bible Estates Gazette – shows a healthy level of activity in Norfolk.  I’m proud to report that Arnolds Keys topped the table, with more deals done and more space transacted than any other agent – see below for more details.

So what are the prospects for 2022?  The principal characteristic of the next 12 months is likely to be a much higher level of inflation, and whilst interest rates will probably edge higher, the fact remains that money invested in ‘traditional’ places will see its value steadily eroded.

It is in such circumstances that investment in property – backed by continued historically cheap finance – will be very attractive.  So where should the savvy investor be putting their money?

The undoubted star performer in 2021 was industrial and warehousing, driven by the exponential growth in online retail, as well as a healthy manufacturing sector.  Expect this trend to continue into the new year.  The mismatch between supply and demand has driven up rent levels, but also capital values, which means that speculative development has become very attractive.  We will see much new building in the next 12 months.

Despite the continued trend towards working from home in the short term, and hybrid working in the longer term, office buildings remain in demand.  In January Google made a $1 billion vote of confidence in the office market by buying its extensive London office – and if a tech giant thinks the office has a role to play, then the rest of us had better believe it.

2022 will see considerable redesigning and reorganisation of office space, continuing the transition towards more collaborative workspaces, built to accommodate hybrid working.

In the retail sphere, the High Street fightback has started, with both national chains and local independent retail businesses jockeying for the best locations.  In Norwich we have recently seen Tesco Express announcing a new store in the city centre, and Costa Coffee taking the former Jack Wills store on Gentlemen’s Walk, as well as a number of new boutique openings including Blakely Clothing.

Occupancy levels in the Norwich Lanes remain very high, and it is good for Norwich city centre to see Chantry Place emerging from its INTU nightmare towards a better future.  We can’t pretend that retail doesn’t still face significant challenges, but the High Street is far from finished.

Finally, other types of property investment are likely to come to the fore, especially agricultural land and holiday lets.  Not only will 2022 be another ‘staycation summer’, there is evidence that the move towards holidaying in the UK is becoming more permanent, making holiday lets a sound investment.