Real estate is still standing
What’s worth remembering is that the real estate sector has not collapsed. It has however experienced its fair share of diﬃculty, such as the shutting down of construction sites, the inability to carry out physical visits and the concerns of both institutional and individual investors who have sometimes preferred to postpone certain decisions. Despite all of this, we are still standing. While we might have feared that it would come to a complete halt, the investment market in Europe has proven to be resilient. While volumes invested in commercial property in 2020 were down 23% on 2019 (compared to a 47% decrease in 2008!), still reaching €222.4 billion, it is important to put the fall into perspective by remembering that 2019 was a record year. The scenario of a sustained slowdown in activity observed during the post-2008 ﬁnancial crisis period seems to have been averted and we expect investment volumes to rebound by up to 13% as early as 2021. On the ground, our construction sites have ﬁnally resumed, clear protocols have enabled a safe return to the workplace, negotiations have resumed and we have accelerated the development of certain innovations such as virtual visits. We held on because, despite preconceived ideas about our sector, we were able to adapt and work with flexibility. We have been present for our clients, companies, individuals and elected representatives. We have helped them through this bizarre crisis. We should be proud of what we have accomplished together over the past year.
A revolution that is only just beginning
A second lesson that we can take from the crisis is that we are still here because we anticipated the profound changes that would be accelerated by the crisis. These include the breaking down of workplaces, the boom in logistics, the return to interacting with our neighbourhoods and the idea of the 15-minute city as promoted by Carlos Moreno, which has come into its own in recent months. Whilst these ideas aren’t new, one can predict that we are on the cusp of a revolution. Above all, this strange year spent mainly between the bedroom, the kitchen and the living room has triggered a positive awareness of our activities by showing how central we are to people's lives. While some pessimists had predicted that new technologies would inevitably tip us into a virtual world, lockdowns and curfews immediately generated a cruel lack of human interaction, of contact with colleagues, of eating out with family, of going to the movies with friends.
A new kind of reality has emerged: real estate, in all its diversity, is an essential asset in our daily lives and shapes all our economic and social activities. Its appeal to investors has not waned, and some asset classes have continued to perform well despite the crisis. €38.1 billion invested in Europe in 2020, a drop of only 2% compared to 2019.
It is now up to us as real estate professionals, to imagine and build this famous world of the future.
A new kind of reality has emerged: real estate, in all its diversity, is an essential asset in our daily lives and shapes all our economic and social activities
The need for greater diversity
Let's not waste time debating the end of offices, many studies conducted from the beginning of the first lockdown, including those by BNP Paribas Real Estate, have shown how much Europeans are eager to get back to the office. It is of course imperative that we drive the emergence of new workplaces, with a modular approach that integrates the traditional office, teleworking, and third places. Square metres will not disappear. These square metres will, on the other hand, be valued diﬀerently, with more room given to common and collaborative spaces, with a new approach to how they are used, whilst reconnecting offices to the city. For while the crisis has conﬁrmed our absolute need for real life, it has also accelerated the need for a greater mix in the design of urban spaces. Offices, housing, serviced residences, local retail, mobility hubs and last-mile logistics will have to coexist harmoniously to improve the living experience of residents, in order to stop wasting square metres in already densely populated areas.
As a developer, marketer, advisor, investor and property manager, BNP Paribas Real Estate is committed to a multi-use and creative approach to real estate and therefore to the city. We have a historic opportunity to push back the limited boundaries of the past by making the circular economy and Environmental Social Governance criteria the new norm, by integrating the challenges of reversibility with a better design of spaces that facilitate a variety of interaction. By systematising offering mixed-use buildings and accessibility, and by inventing a city made both for the current inhabitants and for those who will follow, we can make this possible. In short, it is a question, more than ever, of putting people at the heart of our reﬂexions and actions.
In 2020, we have turned the page when it comes to a functional approach to the city. In 2021, we are beginning our journey towards a truly inclusive and resilient city. Far from being buzzwords, these notions have suddenly taken on a real significance in light of the health crisis. It is now up to us to make them a tangible reality for society.