2020 challenged everyone involved in the Built Environment sector in Ireland and changed it, perhaps forever. In this ‘3,2,1 Review’, we look at three trends which stood out in 2020 focussing on retail, hospitality, construction and the residential market. We also examine two potential changes to look out for in 2021.
Finally, we offer our top tip on how to be prepared for what 2021 might bring.
Three Important Developments in 2020
1. Retail, Hospitality and the Crisis
Few sectors of our economy were more challenged by the pandemic than the retail and the hospitality sectors. Ireland is once again in lockdown with hospitality and non-essential retail largely closed and ‘essential’ retail operating in the face of a resurgent virus.
We previously assessed the legal implications of the crisis on retail leases. We made these assessments at the beginning of the pandemic but our analysis has held up and largely been borne out by activities of landlords and tenants and the decisions of the courts over the course of the rest of the year.
We considered the effects of the crisis on the hospitality sector in a range of articles throughout the year.
We also held a webinar on the effects of the crisis on both sectors early in the crisis.
2. Construction and the Crisis
The initial lockdown brought construction in Ireland to an abrupt halt, which created many issues for developers, contractors and a range of other stakeholders. As the crisis developed, the construction industry adapted. However, we now find ourselves in January 2021 facing yet another prolonged period of disruption in which most construction projects are required to stop.
We assessed these issues affecting developers in two articles.
We also hosted a webinar for Construction industry participants on the impact that events of insolvency can have on construction contracts.
3. Residential & Social Housing Resilience
While other sectors of the Real Estate market in Ireland faced near existential trials, the residential market and the social housing sector held up relatively well. The implications of emergency residential tenancies legislation was a particular focus in 2020.
We assessed these issues affecting residential and social housing.
We hosted a webinar for residential landlords and tenants, and a webinar on PRS and the RTB.
Two Familiar Themes in 2021
1. What's Next for the Office Sector?
It would appear that the office sector is currently in a “pause” position, with all the relevant stakeholders assessing how working practices will change as societies reopen in the aftermath of a vaccine roll-out.
Many questions arise from this: will offices go back to normal as the pandemic recedes? If not, what will happen to the extensive supply of office stock in Ireland and in particular in central Dublin? Will existing owners and developers look to convert office space to other uses? Will existing occupiers seek to exit lease arrangements or sublet?
We considered ‘change of use’ options.
2. Hospitality and Retail – Will Vaccines Create a Recovery?
The retail sector was already facing numerous challenges before the pandemic. The same could not be said of hospitality in Ireland, in particular the construction of hotels was a conspicuously large proportion of new construction in Dublin. Both sectors have been decimated by the crisis.
It is hoped that vaccines will allow a return to relatively normal activity in these sectors in 2021. Whether this actually happens will be one of the key developments to watch in 2021.
One Top Tip for the Coming Year
The short term trajectory of the virus in Ireland remains very uncertain. The economic and societal impacts of the virus will continue to be substantial in the short term and all of this will continue to affect the Built Environment in Ireland.
On a positive note, the rollout of vaccines has commenced in Ireland and there is real hope that some level of normal life could resume in 2021. This would again substantially change how we interact with the Built Environment in Ireland.
2020 was a challenging year for all involved in the Built Environment and particularly for those involved in retail, leisure and hospitality. While transactional activity and construction did continue, some projects and transactions were inevitably paused permanently or temporarily and some that might have commenced were put back on the drawing board. So it is entirely possible that 2021 could see a return to normal levels of commercial activity in the Built Environment sector as projects and transactions that were paused restart and new projects and transactions are considered again.
The recovery in Ireland from the economic downturn shows that such a change could happen very quickly and could catch stakeholders and professionals off guard.
So our top tip for 2021 is to think what a successful vaccine program could mean for the Built Environment in Ireland, for your assets, your projects, your plans. Our Built Environment team is available to help our clients get ready for 2021.
The content of this article is provided for information purposes only and does not constitute legal or other advice.