Predictions

Real Estate Predictions 2022

Building more sustainable and future-proof real estate that defines how we experience our lives and business today and tomorrow.

This year’s predictions for Belgium’s real estate sector reveal a heightened focus on sustainability, digital disruption and affordable housing.

The trends this year are largely being driven by global economic and societal shifts, resulting in a more connected and purposeful world, fueling the humanity’s need for more sustainability and information.

Explore Deloitte’s predictions for 2022

Creating smarter urban environments

Digital disruption is enabling the transition from fixed assets to flexible and smart assets.

The traditional design process has various limitations. How does the structure of the building look? Which materials are used? Where exactly do the pipes run? Which maintenance or repairs should happen on which part of the building? Already today, technologies such as Building Information Management (BIM) and sensors offer a solution by providing a very detailed visualisation of all possible layers of a building. As a result, problems get identified faster, fixed sooner, and maintenance is conducted more effectively. As more data is collected over a period of time, these systems can begin to learn and adapt through artificial intelligence. In other words, digital disruption is helping fixed assets transition into flexible and smart assets.

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Incorporating ESG: Living up to stakeholder expectations and business opportunities

Corporates aim to achieve a significant portion of their sustainability agenda through their real estate strategy.

The focus in the real estate market is shifting due to the current energy prices and the desire for more sustainable living. Because real estate accounts for 40% of CO2 emissions, corporates quickly realised that they can achieve a significant portion of their sustainability agenda through their real estate strategy. Welcome to the future, where corporates occupy environmental friendly office buildings with very low energy costs. This increased demand opens new questions for actors on the supply side: To which extent will tenants be prepared to pay more for sustainable buildings? Will it generate higher rents? Are tenants prepared to co-invest in the renovations in return for decreased rents? What we do see is that tenants are prepared to pay a premium for grade A buildings, as evidenced by the growing gap between grade A and grade B-C buildings.

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CSRD: Booster for a sustainable real estate industry

Institutional investors will continue shifting their portfolio toward sustainable investments.

The Sustainable Financial Disclosure Regulation (SFDR) and Corporate Sustainability Reporting Directive (CSDR) will radically improve the sustainability reporting requirements for many real estate organisations. For example, SFDR ensures that real estate funds are categorised on their level of sustainability reporting. Article 6 reveals that the fund is not compliant to SFDR, while Article 8 and 9 allow the fund a “green” or “dark green” stamp. Institutional investors are already allocating parts of their investment portfolio to SFDR compliant real estate funds.

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The future of the housing business

Unique solutions are emerging in Belgium for the property management of multi-dwelling units.

Belgium offers three unique solutions in context of affordable housing which should continue to grow in importance. Firstly, a housing cooperative enables people to own part of the collective property, but not a specific part or property within it. The cooperative model therefore ensures that space is used sparingly. It offers an answer to the current demand for more residential mobility: we are living longer and longer and the time span that family life represents is getting shorter, but we are still building or buying a family home. Many older people continue to live in the family home that has become far too large. Secondly, a Community Land Trust enables people to own the building but not the land, resulting in a lower cost. Thirdly, in the hamster huren model, part of the rent paid by tenants is capitalized towards the acquisitions of their residential unit through an purchase option.

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Mobility hubs, the enabler of healthy urbanisation

The future of urban transportation is not a matter of being for or against cars.

While we are years away from autonomous vehicles, modal transportation is expected to continue to set the tone when it comes to urban transportation for an array of reasons. For one, cars continue to get banned from cities, and remote working, for example, has resulted in too much parking space in office buildings. Corporate owners have already found creative solutions for their unused garage space, which go from gym to aquaponics facilities. The urban transportation of the future is a trend that will continue to develop and impact real estate in many ways.

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