The 2020 U.S. presidential election has had a ripple effect across the world as Joe Biden emerged victorious against the incumbent.
Real estate in particular is now expected to make a comeback after experiencing low levels of capital, according to Dr. Richard Barkham, global chief economist and head of Americas Research at CBRE.
“From an economic perspective, what happens in the US quite often happens one quarter later in the UK,” said Barkham.
Each recession over the past two decades has had ‘specific casualties’. In 2000, it was the tech industry; in 2008, it was banks; and in 2020, it appears to be the real estate and the office sector.
However, this anticipated uptick in transactions is contingent upon a vaccine becoming available to the public in the first half of next year.
In September, the UK government began making major changes to development rights. For instance, the Town and Country Planning (Use Classes) Order 1987 (UCO) has created a ‘Class E’ of development rights that group together non-residential businesses, such as retail and leisure. This means that a store can change to a gym, then an office and back without planning approval.
“Much of the urban renaissance that we have seen in the western world, including the UK, has been based around office-using employment,” said Barkham. “We have been on the back of a really long wave of office growth. I don’t think it is about to go into reverse, but it could be about to go into a plateau phase and a reimagination of the usage of that space.”