The pandemic has also accelerated change in how we use cities. The rise in remote working allowed workers to leave cities in search of more space, but as we enter a ‘new normal’, some workers are beginning to return.

Smaller cities, by global standards, are benefitting. Citymapper mobility data shows that travel within Manchester and Vienna has already returned to more than 90% of pre-pandemic levels (see chart, below).

By contrast, major global hubs such as New York, Hong Kong and Singapore have only seen mobility return to around 60% of pre-pandemic levels.

Savills Hybrid Working Index examines the factors which may influence the future balance between office and home working, and finds that locations with larger homes, longer commutes, and faster broadband speeds such as Los Angeles, Madrid, and London could make the shift to hybrid working more quickly.

Hybrid working is here to stay in some form, and this only puts greater importance on the home, particularly having extra space to work efficiently. However the office isn’t going to go away either, meaning that location factors still matter in selecting residential product.

Residents will still value additional space, but it is likely that they will also desire to be within reasonable commuting distance of city centres for the days they choose to work in the office.

Opportunity in the suburbs

The race for space and reassessment of home/life balance comes at a time when the oldest millennials are turning 40 and starting families in larger numbers, many moving out of cities for the first time. This generation, which is more accustomed to renting and the flexibility it brings, is fuelling demand for single family rental homes in the suburbs – particularly in North America and Europe.

Historical investor activity in the global multifamily or built to rent sector has focussed on blocks of apartments, though there is now an increase in activity for single family product, as well.

In the wake of the Global Financial Crisis, institutional investors began buying distressed housing stock and converting it into rental properties on the private market, particularly in the US. There is also an emerging trend of purpose-built single family rental housing in both the US and UK. In August 2021, TPG Real Estate Partners and Gatehouse Bank launched a UK single family BTR joint venture. It will focus on new build single family homes for private rental with the capacity to build an investment portfolio with a total value in excess of £500 million.

_{Read the articles within Spotlight: Global Living (Part 2) – 2021 below.}