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The ambition for a ‘net zero’ real estate industry will intensify.


2019 saw the UK Government legislate to reach net zero carbon emissions by 2050, the first major economy to set such a legally binding target. With the operation of buildings accounting for 30% of carbon emissions in the UK, senior industry leaders were quick to respond. This resulted in a wave of net zero commitments across the sector, particularly from property owners. In 2020 we expect to see greater industry-wide uptake of net zero carbon commitments.


For those who have already committed to net zero carbon targets, we will see more in the way of pathways and roadmaps as the journey towards net zero carbon begins in earnest. Meanwhile, we will witness a shift in focus to real estate occupiers, and how their decarbonisation goals translate into the net zero narrative. In line with net zero, climate risk assessment will also be a key focus, with the increasing uptake of the Task Force on Climate Related Financial Disclosure (TCFD) driven by investor pressure, stakeholder demand and commitments such as Principles for Responsible Investment (PRI).


The climate crisis will move even higher up the national agenda.


With the UK hosting the COP26 UN Climate Change 2020 conference in Glasgow, there will be increased public and political attention on environmental issues. We are already seeing an increase in public awareness as the effects of climate change and the climate crisis are becoming far more visible worldwide. With the threat of flooding, drought and poor air quality, businesses are becoming acutely aware of the potential impacts of climate change and ensuring they are adequately mitigating their risks – and the property market is no exception. Furthermore, the Government’s electoral coalition suggests that there may be a new emphasis on social sustainability – for example incentives to invest in deprived areas.


There will be a growing consumer backlash against unsustainable retail practices – such as home delivery, returns, pollution and congestion, and high levels of waste.


Sustainability – and being able to evidence sustainable practices - will become one of the key drivers of retail performance. Some companies, such as Primark in Germany, have already had their bottom lines hit by campaigns over ethics and sustainability - a sign of things to come. Supply chains and delivery processes will change, and with them the geography and portfolio of both retail and logistics properties. Some of this change will be driven by new business models, such as collection points (which could come with their own range of amenities and other uses) or the expansion of click-and-collect – but a more effective use of data and artificial intelligence (AI) will be key to driving down the environmental footprint of these sectors. More generally, retailers will have to think more carefully about how their logistics functions can be incorporated into their retailing space, and vice versa.


UK Property Predictions 2020


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