The Future of the Real Estate Investment Services Industry Post COVID-19
2020 has seen tremendous levels of unprecedented change, uncertainty and distress in jurisdictions across the globe due to COVID-19. The novel corona virus has impacted almost every industry around the world and has bought about various modifications to the way that we live, do business and interact with those around us. The real estate industry is no stranger to the impacts of COVID-19 and, like many other industries has undergone scores of change and adjustments.
How the demand for office space has been affected
March 2020 saw a skyrocket in the number of people that are working remotely due to the global pandemic. There are many trends that will impact the commercial real estate industry as we know it, one of the main trends being the need for large office spaces in the future. Though working remotely presents its challenges and limitations, the global pandemic has proved that it is achievable. Many entrepreneurs and employees who would have travelled to and from work, are now conducting business and engaging with clients online via various virtual platforms. This in itself presents the change in the dynamics of real estate industry, for instance, there may very well be an increase in the purchase of residential real estate which can accommodate a home office.
The advantages of keeping a commercial office space
Though working from home is growing in popularity, there are still advantages of having a commercial office space. Office space will not fail to retain its significance as a strategic mechanism or tool for competitive advantage, business development or corporate culture.
One of the main concerns of office space solutions losing their popularity and demand is hosting client meetings or engaging with clients in home offices. It is not always ideal to meet with clients at a home office for a number of reasons, the principal being data privacy. A physical office space allows business owners and investors to host client meetings and provides them with the option to work with clients in person ; this in itself makes interactions with clients a lot smoother as you are more likely to anticipate and meet their needs in addition to reading their body language.
Is location everything?
The location of an office is held in high regard and is deemed as a paramount strategic decision for many companies. Selecting the ideal location for an office allows entrepreneurs and investors to grow their business successfully as well as promote their brand.
It is more important to businesses that want to offer products or services to customers that are within close proximity of the space as it will give them a better understanding of the demographics of the general area. It’s also key to know where the competitors are based and that in itself can assist business owners and investors in determining which areas are most suited or responsive to their business.
The unpreceded changes that the retail sector will face
The retail sector of the real estate industry has been and will continue to face long term challenges which have now been amplified due to the global pandemic. With e-commerce on the rise, warehouse space will become a viable, attractive and sound investment for commercial real estate investors. The volatility and uncertainty of the current situation has proved that investors should always seek the right advice in order to do deals in a strategic manner which will generate the desired yield.
This growing demand in e-commerce has modified how investors and landlords prepare for the progressive needs of companies that operate within the last mile distribution sector.
When should investors invest in commercial real estate?
The uncertainty and distress that the pandemic has afflicted on many industries around the world is unfamiliar to most. Many argue that investing in commercial real estate in the midst of a pandemic is not an ideal time to make an investment decision of this nature, however, others suggest that the real estate industry presents advantageous opportunities during this unprecedented time.
Experts suggest that there are many real estate investment deals available – you just have to know which deals to invest in.
The future of real estate in the post-Covid-19 world?
The “post COVID-19 world” will develop new ways of doing business and investing in real estate which will derive from the experiences gained during the pandemic.
COVID-19 has demonstrated that social distancing and implementing various protocols can still produce results. It is now possible for real estate companies to conduct virtual tours showcasing properties and zero contact meetings.
Another theory is people have realized the importance of having a permanent home during times like these as this can be the safest environment. The increase in working from home has created awareness in ensuring that individuals have a home with the right space and features. In the future, people will be looking at owning homes rather than renting as that is the safety net that is required.
Digitization will also change the way real estate works and the demand for certain investments. It will not only speed up the processes, but also bring in more transparency in dealings. Overall, real estate is set for an exciting new journey!