Facing headwinds, UK property sector needs innovation to keep pace

In mid-March, thousands of politicians, developers and investors from across Europe gathered in Cannes for the world’s leading annual real estate conference and exhibition event, MIPIM. This year, attendees placed an unprecedentedly strong focus on ESG and building innovation. Social impact also featured highly on this year’s agenda, particularly in terms of urban regeneration and placemaking, while participants highlighted the role of new technologies in delivering future-fit real estate projects.

Given the alignment between these aims and its policy priorities, the UK deployed many delegations from London and other cities in a bid to maintain its international image for real estate investment. While, according to an ING Media report published during MIPIM, London remains the “most talked about city in Europe” in terms of digital visibility, with enhanced investment prospects as a knock-on benefit, the UK is facing a number of headwinds. Foreign investment has dipped in the post-Brexit era, and certain MIPIM attendees decried the damaging impact that the short-lived fiasco of the Truss government has had on London’s investment reputation, with some labelling it “a worse impact than Brexit.” The British property sector will need to innovate to keep pace, following the lead of forward-thinking firms like international property developer MiddleCap, founded by Slovakian entrepreneur Miroslav Vyboh.

Putting sustainability front and centre

International property developer and investor MiddleCap, founded in 2018 when MiddleCap Equity Partners fused together with Miroslav Vyboh’s London company Mayfair Assets, is an example of a firm with a particularly keen understanding of London’s potential and the requirements of a future-proof real estate sector.

MiddleCap has adopted a holistic, tech-driven approach to sustainable real estate, perhaps best encapsulated by its Southworks office development in Southwark, London. Delivered in 2021, Southworks incorporates sustainability at its core, quite literally, with a network of Internet of Things (IoT)-connected sensors forming a central ‘brain’ that allows tenants to monitor air quality, noise levels, light and water, thereby helping to optimise energy usage, cut carbon emissions and boost employee health and well-being.

Moreover, its inclusion of outdoor green spaces and natural light further enhances the working environment while reducing electricity demand. “Our commitment is to bring to the market offices that are enhancing wellbeing, building performance, sustainability and health and safety”, Miroslav Vyboh underlined, noting that Southworks’ innovative features saw it become the first UK building to achieve Platinum Smart Building Certification, and only the second globally at the time of this distinction.

Crucially, Southworks has shown that sustainability and high-quality office environments have become an absolute necessity to thrive in London’s increasingly competitive market. Indeed, its first tenant, global consultancy Steer, chose Southworks due to their corporate commitment to become a net zero company by 2025.

Sights set on the future

Hardly known for resting on its laurels, MiddleCap remains intent on developing new, innovative approaches to design and construction for its future projects – and a recent move should prove helpful in this pursuit.

After four years as majority shareholder of Slovakian construction company Sytiq, MiddleCap is selling its shares to the former’s four original managers. Capitalising on Sytiq’s strong growth during MiddleCap’s time at the helm, as well as the opportune moment for monetising the firm’s investment, this sale will free up capital for investment in its promising pipeline of projects, through which the company aims to “raise the bar” for future buildings.

As the European Environment Agency has highlighted, while sustainable design and construction for new builds is critical, over 85% of existing buildings will likely still be in use in 2050, meaning that extending building lifespan and intensifying usage via renovation will play a massive role in decarbonising the property sector. Accordingly, MiddleCap’s vision, as Miroslav Vyboh underlined, places a strong focus on refurbishing and transforming existing buildings and spaces in line with circular economy, sustainability and well-being principles.

Breathing new life into cities

With its striking Spilka Offices project delivered in Bratislava in 2020, MiddleCap has already taken a bold first step in the renovation space. In collaboration with Bouda Masár Architects, this venture converted a listed building and former brewery in the historic centre into a mixed-use office development with a restaurant on the ground floor, while integrating its original heritage with innovative design elements required of future-fit office spaces.

Building on Spilka’s success, MiddleCap is currently undertaking the restoration of a 1970s office building in the City of London. Dubbed Seal House, this project capitalises on the building’s prime location overlooking the Shard and the River Thames, as well as the potential of the building itself to deliver an 11-storey office development complete with a rooftop viewing garden and restaurants. This partnership with Eric Parry Architects is exactly the type of project London will need to revive its office sector.

But MiddleCap is not stopping at buildings. In Berlin, its Ritter Jungel project will transform a carpark and surrounding area in the densely-populated Kreuzberg borough into a thriving, sustainable neighbourhood, incorporating new greenery, public space, a courtyard and community infrastructure. Working with architecture firm MVRDV, MiddleCap will harness the potential of smart, green urban planning to boost the community’s climate resilience, while creating an attractive, healthy and social living environment for residents.

With this diverse portfolio of projects, MiddleCap is emerging as a leading sustainability and social innovator in the European property development sector. UK developers and public authorities will need to rapidly deliver similarly future-oriented projects and market its industry to the world in the turbulent post-Brexit, post-pandemic landscape. As this year’s MIPIM has shown, cities and countries that fail to incorporate the latest green, tech and design advancements will get left behind, so there is no time to waste.