What happens post Covid 19

Offices and Warehouses leasing after Covid-19

As the impacts of Corona Virus rapidly cover the world, commercial property companies are being extremely affected based on their asset type, sector and region. Businesses are struggling to preserve financial steadiness, respond to fluctuating demand dynamics and shortage of labour, also at the same time complying with the requirements laid down by the government. Occupiers facing liquidity problems may turn toward deferring or terminating contractual lease payments. Majorly the sub-markets (hospitality and retails) are with the possibility of facing swift and direct impacts while sub-sectors that includes space for offices can be affected by the growing supply chain and home-based working system. Conversely, as business volumes are moving towards failure in the near term, they are also expected to revive in the longer term. As lockdown is being gradually eased, Business owners and workers are of course asking questions on which aspects of working life they want to maintain. We consider what the future of office and warehouse space may look like as majority of the world emerges from lockdown.

Office space to Rent?
As corona virus has spread across the globe, large number of employees who in the past commuted to their various offices have been mandated to utilize online tools and get use to virtual meetings with colleagues and clients. The high acceptance of technology during the period of epidemic has been a major concern to commercial property marketers that office spaces could become useless. A lot of office based businesses started working from home during the epidemic and, despite initial problems associated with network and connectivity issues, the consensus seems to be pleasant surprise as employees report enjoying the lack of commute and improved work-life balance. However, there will be no need to rent spaces for offices.

Warehouse Space to Rent
As the acceptance for online retail rises, likewise there is high increase in the demand for warehouse spaces which serves these online stores. Although company like Amazon have long been exploiting on this business model, requirements for small amounts of logistics space is on the high side most especially during the lockdown period as businesses who had not been involved in online store now develop one.

In this situation of economic turbulence caused by the Covid-19, investors are viewing warehouse spaces as the only alternative to secure their businesses and many real estate investment trusts are seeking to diversify their portfolios. However this will put more demand on warehouse space for rent. So far so good, I believe pandemic has affected warehouse space positively.
In Conclusion, the present epidemic is a rapid-developing environment with impacts of changing magnitudes on commercial property markets. The intensity and the period of stay of the epidemic will remarkably adjust the degree of disruption in the sector’s performance.