Cushman & Wakefield reveals top real estate requirements for 2040

Real estate services firm Cushman & Wakefield has released information from its “The Shape of Real Estate” report. Detailed analysis of demand-side drivers revealed that seniors’ housing, data centers and life science are at the top of the UK sectors requiring an increase in commercial and residential property stock by 2040.

Quantifying the space requirements for the UK’s fastest growing sectors over this period, the report shows that the stock required in 2040 will be driven by behavioral and economic changes due to technological progress, demographic change and evolving building standards and requirements. environment.

With the number of over 65s expected to increase by almost four million to almost 17 million between today and 2040, Nursing Homes require the greatest increase – in percentage terms – in stock to meet demand. At a 171.3% increase over existing seniors housing levels, the total change is proportionately greater than all other sectors.

“Understanding the variables driving demand helps identify imbalances in the UK property portfolio and in turn help shape future cities. The largest requirements for additional stock are expected to focus on housing and caring for an aging population. However, we expect the logistics and industrial and residential sectors to attract the most investment by 2040 and, in turn, increase competition for space. Looking ahead to see the trajectory of real estate in the years, and indeed decades, to come has never been more important.

“However, there are significant external factors that will influence real estate’s potential to respond, including the ongoing impact of inflation, government policy and evolving environmental and business standards. The property market is constantly responding to how we use space, and as the number of properties increases, alongside increased capital investment, the pace of change will continue to accelerate.”

Daryl Perry, Head of UK Research and Insights, Cushman & Wakefield

Despite forecasts of a lower rate of economic and population growth in the UK than in the period 2005-2023, demand for real estate continues to be significant. Cushman & Wakefield’s projections for annual increases in requirements for the life sciences, hotels and logistics and industrial sectors range from 2.6% to 0.9%.

Similarly, demand for housing is not expected to decline substantially until 2040, as slower population growth is offset by people living longer, the growing number of single-person households and migration. Owner-occupied housing is expected to see the lowest level of growth as affordability continues to be difficult amid a supply-demand imbalance, while the PRS is expected to increase its share of ownership, reflected in an expected increase of 43.1% of the required stock.

“Despite increased awareness of the UK’s aging population and the burden it will place on UK public services, the delivery of housing for the elderly has barely increased. As our research shows, it is essential that births increase substantially if older people are to live healthier and happier lives for longer. Increasing the number of age-appropriate housing will help relieve some of the pressure on an already struggling health, social care and housing system, as well as freeing up age-free housing stock, helping to ease the demand imbalance .

“Our report estimates that an additional four million homes will be needed by 2040, and even this rate of construction will maintain historical trends rather than address the chronic housing shortage.”

David Haynes, Head of Specialty Markets, Cushman & Wakefield