Real Estate Desire, not Demand?

As part of the Big Picture series, I've been speaking about why the industry's favourite metrics are missing the one thing that actually drives value.

We've landed on a word that commercial real estate still treats as faintly embarrassing: desire. In an article in Business of Fashion this week, they say Kering's CEO Luca de Meo is reworking incentives around desirability rather than topline growth, whilst Marketing Week reports that he thinks the group must "reignite desirability… house by house, product by product, client by client" after underinvesting in the sort of brand work that actually speaks to consumers. Bernard Arnault has been making the same argument in more elegant language for some time; in January he said LVMH's momentum rested on the "powerful desirability" of its brands, on "extraordinary stores and cultural experiences," and on the ability to "inspire dreams." So what can we learn? Strip out the silk scarf and that's basically the brief for any serious destination in the built environment.

“Demand is what turns up after desire has already done the hard work in the kitchen.”

Commercial real estate, of course, prefers safer nouns. We say demand, footfall, take-up, absorption, rent. All useful, all respectable, but all slightly late to the party. Demand is what turns up after desire has already done the hard work in the kitchen. Innesco has been circling this for years under the more boardroom-friendly label of brand equity, but perhaps it is time to call the thing by its real name. The places that win are not simply efficient; they are magnetic. They make people want to visit before they need to visit, and they make brands want to be seen there before the spreadsheets have finished loading.

JLL's latest European retail outlook says retailer expansion is concentrating in core locations and prime destinations, especially where stores function as engagement hubs rather than mere sales channels. In other words, the market is already rewarding places that behave less like brick and mortar vessels or containers and more like cultural propositions.

You can see it everywhere once you stop pretending desire is too fluffy to measure. Cushman & Wakefield data reports that Europe's leading luxury streets saw a 13% rise in new store openings last year, with fierce competition for prime locations. In the UK, Landsec's retail destinations beat the wider market over the 2025 Golden Quarter, with sales up 4.9% against a national benchmark down 0.2%, while footfall rose 0.7% against a market decline. King's Cross tells the same story in a more theatrical register: total sales up 13.5%, retail sales up 16%, Coal Drops Yard up 20%, because curation, atmosphere and repeatability compound results.

And in offices the lesson is identical, just dressed in better wool. Reuters reported this week that Europe has now logged 20 straight quarters of prime office rental growth; London demand for new office space is running at more than 11 million square feet, around 20% above the long-term average, and Brookfield's One Leadenhall is fully let, with the top floor taken at what is thought to be a record £160 per square foot for the City. That is not generic "quality." That is a desire premium.

“They are fighting to feel investable, visitable, leaseable and culturally current.”

Which is why MIPIM earlier this year felt like an industry circling the idea without quite daring to say the word out loud. The reports out of Cannes kept returning to the same themes: high-quality space, regeneration, patience, partnership, place. CoStar heard strong demand for better space in regional cities as a driver of rental growth and asset performance, with Birmingham held up as a prime example; Place North West said the refrain was "good growth" rather than quick wins. Remove the conference dialect and the message was clear enough: cities, districts and assets are now competing on narrative as much as numbers. They are fighting to feel investable, visitable, leaseable and culturally current. Placemaking has become the tote bag slogan of the sector. Desire is the harder discipline underneath it.

“Desire should be treated as a leading metric rather than a happy by-product of performance.”

So the real lesson from our fashion industry sibling is not that commercial real estate should become more glamorous (though a few leasing brochures could certainly use the assistance) - it is that desire should be treated as a leading metric rather than a happy by-product of performance. That means paying far more attention to the signals that sit upstream of revenue: share of search, social advocacy, repeat visits, dwell time, the quality of inbound leasing interest, the willingness of brands to wait for the right address, and the strength of the halo a place gives a tenant before the tenant adds anything in return. Even Battersea Power Station's leasing team is now openly talking about social influence, cultural relevance and a brand's digital halo as part of leasing logic, not as marketing garnish. The sector already knows this, really - it just prefers the vocabulary of demand because it feels harder, safer, more tangible somehow. Whilst brand equity is the polite term, #Desire is the useful one.

And the assets that understand the difference will not merely capture demand in the years ahead, they will author it. Reach out if you want to discuss more.