Where tech adoption and COVID collide

We asked the real estate sector office occupiers, renters, retailers and life sciences businesses what impact COVID-19 is having on demand for real estate in their area, and also on adoption of innovative technology.

The sweet spot for innovation and demand driven by COVID-19 is life sciences, where both the occupiers and the real estate professionals see equally positive opportunities. Driven by spectacular technological breakthroughs like COVID vaccine development, and with public and private sector funding pouring into the sector, life sciences is an asset class in the upper right quadrant, very much embracing the opportunity.

By contrast, in-store retail is `stuck in the headlights’ according to our polling – beset by falling demand caused by lockdowns and less likely to have adopted innovative technology as a result of COVID. Interestingly, real estate professionals are significantly more pessimistic about real estate demand from the sector, than retailers themselves. This may be a reflection of increased demand for logistics space as a result of the accelerated shift to online shopping.

While real estate professionals see offices as the most actively innovating in response to the pandemic, occupiers are less convinced, although they also seem less pessimistic about demand for office space. This perhaps reflects the reality of a blended working approach which looks here to stay in the immediate future.

The build to rent sector, by contrast, is seen as `lucky’ by renters who see that demand is strong but do not believe they are seeing enough innovation in the light of COVID-19 rather than redeveloping tired properties.