After a year in which London’s population plunged by 700,000 thanks to an exodus of foreign workers — with another 300,000 Londoners expected to leave this year — and with New York’s population falling by as much as 2,600 a week, urbanisation hardly seems like the trend of the moment. Rather the reverse.

Yet some are predicting that urbanisation is going to drive demand in 2021.  Urban living and the supply chains and logistics floor space that supply it will drive returns across Europe, announcements from Harworth Group and Europa Capital said.

The two businesses are not alone, as a growing cohort of UK investors and developers opt for the safety of the beds-and-sheds formula.

Harworth Group’s trading update for the year ended 31 December 2020 showed the results of a focus on beds and sheds in the UK. Harworth collected 92% of rent for the December quarter to date, including from the small number of tenants on payment plans. This compares with 77% for the December 2020 quarter across the whole of the UK commercial property sector, according to Cushman & Wakefield figures.

Rental growth, excluding new acquisitions, was 6.8%. At year-end, sites with more than 1.2M SF of employment space and over 2,500 residential plots were in the planning system awaiting a decision.

After three years of being a net seller, Europa Capital was a net buyer in 2020, transacting close to €500M. The majority of transactions (€380M), including the largest sale, were in the residential sector, which it said continues to present value across the risk/reward spectrum and aligns with its clients’ return expectations. Deals were signed in London and Copenhagen, where it built on its €1.2B investment into BTR and purpose-built student accommodation.

Europa Capital is majority owned by Mitsubishi Estate.

“Living and logistics remain preferred sectors for us in 2021, having proved durable and resilient from both an occupier and capital performance perspective in 2020,” Europa Capital Executive Member Jason Oram said.