Senior homes, data centers will need additional real estate in U.K. by 2040, shows data –

Seniors’ housing, data centers and life sciences will need increased real estate stock by 2040, a new study by Cushman & Wakefield has revealed. According to the ‘The Shape of Real Estate’ report, the additional stock will be driven by economic and behavioral changes due to advanced technology, demographic shifts and changing standards and requirements of the built environment.

At an increase of 171.3%, seniors housing will need the highest growth. With the number of people over the age of 65 years expected to rise by around 4 million to 17 million by 2040, seniors housing will need the highest stock to meet demand.

This sector was followed by data centers (98.9%), life sciences (53.5%), care homes (44.8%) and PRS (43.1%), according to the report. There is a sudden demand for data storage, driven by Artificial Intelligence, subscriptions to cloud-based content services and e-commerce. This has led to data centers requiring to almost double their existing stock.

Life Sciences will also need increased space as public interest in health, green and pharmaceutical industries is expected to rise, alongside the continuing advancement of scientific research.

Understanding the variables led by demand helps to identify the gaps in the real estate portfolio in the U.K. and, in turn, shape future cities, said Daryl Perry, head of U.K. research and insight at Cushman & Wakefield. The highest requirements for additional stock are likely to be focused towards housing and caring, for an ageing population.

“However, we expect the logistics and industrial and living sectors to attract the most investment through to 2040, and in turn increase the competition for space. Looking ahead to see the trajectory of real estate in the years, and indeed decades, to come has never been more important. Yet there are significant external factors that will weigh on the potential for real estate to respond, including the ongoing impact of inflation, government policy and evolving environmental and business standards,” Perry said.

Although the rate of economic and population growth in the U.K. is projected to be more subdued than in the period between 2005 and 2023, there will be considerable requirements for real estate, the report said.

Cushman & Wakefield’s projections for annual increases in the requirements for the life sciences, hotels and logistics and industrial sectors range between 2.6% and 0.9%.

Similarly, the demand for housing is not likely to ease materially till 2040, owing to the slowing population growth being offset by people living longer, rising numbers of single-person households and migration.

Owner-occupied homes are projected to post the lowest level of growth as affordability continues to be a challenge amid the supply-demand imbalance, while PRS is expected to see a significant increase in its share of tenure, reflected in a projected 43.1% required increase in stock.

Despite the increased awareness of the ageing population and the burden it will place in the public services, the delivery of senior homes has not seen a major increase, said David Haynes, head of specialist markets at Cushman & Wakefield.

“It is essential that delivery increases substantially if older people are to live healthier and happier lives for longer. Increasing the number of age-appropriate homes will help relieve some of the pressure an already struggling health, social care and housing system is set to face as well as releasing non-age restricted housing stock helping ease the supply demand imbalance,” Haynes said.

Four million additional dwellings will be required by 2040 and even that rate of construction will maintain historic trends instead of addressing the chronic shortage of homes, Haynes added.