Brace yourself for more negativity in the commercial property press
Is this the new great depression? Well no not quite. I understand negative headlines sell more and get more clicks than positive, hence my title today!
With wave after wave of negativity in the press, I am keen to shed some optimism for my friends and colleagues in the commercial property space. I recognise I am no expert but here is my take…
In a recent Property Week survey ‘Impact of Covid-19 on the property industry,’
One of the key questions was ‘Is this as severe or worse than the great depression’. Thankfully only a quarter of respondents believed so.
Business as usual
70% of the UK firms have furloughed staff whilst only 50% of the property industry has, with an expected 35% to return in June. That’s half of the industry still working at full capacity, even though the UK has been on lockdown for over 2 months!
80% still expecting bonuses
25% have asked staff to take pay cuts, whilst 20% have suspended bonus payments. Which could suggest that investors and boards expect short-term disruption whilst the market stabilises.
Short term support for industries hit hard
One of the most immediate impacts has been the introduction of rent holidays, and the reduced volume of deals due to lockdown restricting access and businesses freezing initiatives whilst they assess the wider impact. This according to speculation is expected to hit values and rents by 10-40% over the next 12 months.
This can be seen as positive for the wider industry in the long term. With retail and leisure being hit the hardest, reduction in rents provides an opportunity to breathe life back into these sectors by providing stimulus packages from government and industry leaders to allow these businesses to get back on their feet.
New ways of working
With the country using, and in many cases, embracing new flexible and digital ways of working the sector and businesses have an opportunity to think creatively and to reinvent commercial space. The need for human f2f connectivity and collaboration will always be a key part of society and business but now we have the opportunity to modernise our outdated commercial spaces to fit modern business needs and reflect a more agile, dynamic way of working for the post COVID workforce.
Wider reading suggests that pre the crisis the market was at a high and that we are expected to see positive returns into 2021.
We all know this is not a great time, however, the media do love reporting doom and gloom.
As a society we have come together with enduring positivity, this will surely be reflected in the coming months and years as to how business and teams chose to tackle the current challenges.
At our heart, we are all problem solvers and I look forward to working with some of the most creative and intelligent people out there to get the economy back on its feet.
With 30 years of experience providing high-quality photography and video for the commercial property sector, we are thankful to see projects beginning to come back online. If you have an active project that requires our expertise do reach out.
I look forward to hearing your feedback and comments.
MD, High Level Photography