2025 offers a wealth of opportunity for real estate and development. HBD is embracing this promising outlook with confidence, focusing on sustainable growth, innovation, and strong partnerships.
In this blog, our Managing Director Ed Hutchinson sets the scene for the year ahead, delving into the economic landscape, our ambitious targets, and the collaborative approach driving our success as we continue to build momentum into the future.
As the UK settles into a new political era, the medium term outlook for the economy and the real estate market is a more promising one in comparison to the last two to three years. Budget aside, it’s true that the current Labour government isn’t the most headline grabbing but, after recent years, stability is something that UK businesses can feel positive about.
The new government’s commitment to a medium term plan and its focus on attracting private investment is setting the stage for a more predictable, supportive environment for business.
At HBD we see reasons for optimism around the opportunities political stability can provide as we continue to build and nurture strong partnerships with industry.
Strong economic prospects
The coming years offer a brighter economic forecast compared to the challenges of recent times. Inflation is expected to hover around the Bank of England’s 2% target, fostering confidence across sectors, while the average base interest rate is anticipated to be at or below 4% by the end of 2025.
We anticipate the UK’s GDP to grow this year and average 1-7% to 1-8% over the next three years. This will be an improvement on the previous two years and will hopefully help improve business sentiment.
Whilst many of the challenges faced by the private sector throughout 2024 shall remain in 2025, a more stable economic backdrop should help to bring about an increase in the volume of transactions within the real estate market. Pension funds and other institutional investors are predicted to re enter the market and occupiers will hopefully begin to feel more confident about acquiring or leasing new space.
For HBD, we shall be able to respond positively to these market changes as we look to commence construction on a larger proportion of our £1.2 billion development pipeline than we have in any year since the Covid 19 pandemic.
Building our momentum
With a positive outlook in mind, which will be important for us to achieve growth, we’re focused on realising our ambitious medium term targets. These include:
- Maintaining a committed development pipeline of £300 million Gross Development Value (GDV).
- Completing £200 million GDV per annum.
- Maintaining a future development pipeline of £1.2 billion, with 70% dedicated to industrial and logistics projects.
These metrics are more than just numbers: they represent our commitment to sustainable and strategic growth.
In 2024 alone, we completed £200 million GDV of net zero projects, including Island, 100,000sq ft of cutting edge, net zero carbon workspace in central Manchester and Momentum, a pioneering new industrial and logistics development, creating 380,000sq ft of space on 20 acres of remediated land in Rainham.
Projects of this calibre highlight our dedication to sustainability and innovation, setting the standard for our future net zero projects.
What’s more, we’re embracing the invaluable lessons learned from these projects to ensure our future developments adhere to the same standards when it comes to environmental performance.
Strong partnerships, strong future
Core to our success is a collaborative approach. We love to work collaboratively. In fact, over 80% of our projects are joint ventures. Building and maintaining quality relationships with local authorities, funding partners, occupiers, contractors, consultants, and supply chain partners is critical.
For us, partnerships grounded in mutual trust and a shared vision are essential for delivering outstanding projects that make a real difference to people and the communities where they live and work.
A good example of where we believe we have established a partnership, where both parties’ ambitions are aligned, is our newly formed collaboration with Feldberg Capital, which is known as Origin, where our main goal is to develop future logistics where sustainability runs through everything we do.
A positive path forward
HBD is poised for steady growth in the years ahead. Against a more stable political and economic backdrop, we’re confident in our ability to expand our project portfolio, deliver more and more sustainable developments, and nurture the partnerships that underpin our success.
With our committed team, who are empowered by our clear goals and ambition, we aim to create great places today to build a better tomorrow.