That was the year that wasn’t

Well, I got that wrong. At the start of 2024, I predicted that some parts of the industry would ‘do more in ’24’ while others would be in ‘survive ’til ’25’ mode, but I hoped – and expected – more to be in the former camp. Unfortunately, more were in the latter, and not all of them did survive, ISG being arguably the biggest casualty.

It all started so promisingly. Although some sectors were struggling to cope with the removal of the final pandemic stabilisers, and activity levels remained subdued, the market outlook for many was improving – even the office and retail sectors. A couple of MIPIM regulars I know were so confident it was going to be a boom year that they elected not to head to Cannes this March in the hope of getting first dibs on deals here while others were quaffing rosé over there.

The deals didn’t happen, or not in volume anyway. Too many would-be sellers were wary of selling at the bottom of the market and too many would-be buyers feared the bottom had not yet been reached. Interest rates remained at a 16-year high of 5.25%.

In the meantime, the Spring Budget came and went, with few taking much notice given the likelihood of a new government by the year end, emphasis on the word end. In May, the then prime minister Rishi Sunak surprised everyone by calling a July election – only weeks earlier, c-suite guests who attended a BE News General Election roundtable debate, sponsored by JAI and NWEC, were predicting November.

Cue another pause in activity as the industry waited for the outcome of the election and then to digest the ramifications of that outcome. Most welcomed the first Labour government for 14 years and assumed that while it was not nailed on that things would ‘only get better’, there was no way they could get worse. Or could they?

Weirdly, they got better AND worse. Interest rates fell for the first time in more than four years, from 5.25% to 5%. Housing and infrastructure, oddly absent in the early stages of Labour’s election campaigning, suddenly came to the fore, alongside planning reform. However, the politicians didn’t. Labour’s pre-election talk of wanting to work closely with the industry was just that: talk.

Although there was growing disquiet about what the lack of engagement all meant for business and the built environment industry, renewed political stability coincided with an increase in certainty and, with it, activity, notably in the retail sector.

Then there was the mother of all Budgets and the pause button was pressed once more – or would it be more dramatic than a pause? Would the market grind to a halt again as the full impact was felt? Was this confirmation that Labour was more than anti-real estate, it was anti-business?

Sweeping changes including the reinstatement of mandatory housing targets and revisions to the NPPF somewhat assuaged concerns on both fronts, as did Angela Rayner’s reversal of Michael Gove’s decision not to approve the demolition of M&S on Oxford Street in London. There was more good news this month with the High Court’s decision to give the go-ahead to Mitsubishi Estate and CO-RE’s redevelopment plans for the former ITV Studios on London’s South Bank, NewRiver REIT’s takeover of Capital & Regional and Landsec’s acquisition of a 92% stake in Liverpool ONE.

So, against all the odds, the year ended on a high. With the UK economy supposedly heading for “the worst of all worlds”, the question is whether the momentum can be maintained. Can the industry do more than survive next year? Will it ‘thrive in ’25’ – or find itself ‘in a fix ’til ’26’?

Merry Christmas from BE News!

OK, it’s time to hit the mince pies. We will be back on 2 January after a much-needed break. Thank you to all our readers, advertisers, sponsors and partners for supporting us in our mission to make built environment news, insights and events accessible to all. We wish you a merry Christmas and a happy and prosperous 2025