BE News' What’s in store in ’24?
Several of our clients shared their thoughts on the challenges and opportunities in the year ahead with BE News, giving their predictions for 2024.
All published by BE News, 10-12 January 2024.
Hannah Smith
Managing consultant, CACI
“2023 was yet another challenging year for real estate as persistently high prices on consumer goods and record housing costs continued to squeeze consumer wallets. This was set against the backdrop of ongoing global instability, which has characterised the last four years and means that places have had to work harder than ever to win their share of a shrinking pot of spend. There is however cautious room for optimism in 2024. 64% of us said we were worried about the cost of food this Christmas, and while this is very high, in 2022 it was 81%, suggesting confidence is growing, however slightly. We have sought experiences this winter, with early indicators suggesting more time spent eating, drinking, and socialising in December. As we enter 2024, placemakers must lean into the evolving customer missions they are serving – they must stay relevant by closely tracking market trends in order to grow spend through unique experiences.”
Janine Constantin-Russell
Managing director, Outlet Shopping at The O2 and The Entertainment District
“Our unique combination of leisure, retail, and F&B is a key differentiator that drives our success. We will continue to innovate to maintain this position in 2024, adding to and evolving our mix to provide even more choice for visitors. For Outlet Shopping at The O2 specifically, we will be focused on securing more outlet firsts and establishing its position as one of London’s ‘must visit’ shopping destinations. For the Entertainment District, the emphasis will be on exploring more innovative solutions to maximise the vast and unique space we have, including accommodating new sports, leisure and wellbeing offers, such as Padel Social Club. Destinations must continue to think about the needs and desires of future social culture trends to deliver enticing experiences. Doing so is part and parcel of being a unique destination like The O2 and is what enables us to thrive.”
Ted Schama
Joint managing partner, Shelley Sandzer
“Having reset twice, the hospitality market is driven by a new set of values. While ‘location, location, location’ still stands, 2024 will also be about ‘contribution, contribution, contribution’ as securing a capital contribution and the right financial matrix increasingly define sustainable deals. 2023 saw the softening of premiums on fitted units, with some businesses even finding sites taken back by landlords available on new leases for no premium at all. Many of these were in prime locations that might previously have been financially out-of-reach. This has had a knock-on effect on shell units too, and now a two- to three-year package is common. This shift in dynamics means property costs are more sustainable and that is stimulating growth. This is attracting investors, and I see the trend of continued corporate activity gaining momentum this year. This is exciting news for the sector as a flow of capital underpins hospitality and certainty encourages confidence. Long may it continue.”
Graham Sturge
CEO, RED Construction Group
“Given market uncertainty, the initial focus from RED Construction Group in 2024 will be on what we can control – delivering projects and creating certainty for our clients. The construction industry is currently in a volatile state with numerous main contractor administrations in 2023, impacting the supply chain and posing a significant challenge due to their exposure. We are anticipating the market will stabilise towards the end of 2024, so strategic diversification is in our sights, both geographically and across new sectors, all while ensuring a measured and controlled approach to growth. We have identified areas where RED can instill confidence, fostering stability and nurturing relationships. Company administrations do create opportunities, and it is imperative for those that remain to pick up the slack. The next 12 months will be challenging, certainly at the start, but with every ebb comes a flow, and our steadfast and agile nature puts us in a great position to provide the solutions needed.”