More client views on longer term Covid-19 impact
One of the key themes consistently emerging across all our conversations with clients has been the impending change in customer ‘buyer behaviour’. We blogged in April on some of our clients’ initial views on the impact of Covid-19 on various property sectors. Here’s some more:
Co-living – This is a huge setback for the nascent sector. In the short term, who is going to want to share a kitchen with some random people they don’t know whilst having only a very limited private living space?
Resi for sale – With the combination of the fear of the virus, a reawakened desire for access to the great outdoors and the increased/normalised need to work from home more, thinking seems to be that Covid-19 will release a significant outflow from cities and towns. Why buy/rent a 2 bedder in the city centre when you can buy/rent a 4 bedder with a garden in the commutable countryside. And if you are only travelling into the office 2-3 days a week now, what is deemed commutable has just pushed further out. In short, after many weeks/months locked down, buyers will want more ‘bangs for their bucks’, less commuting and quality of life will be a pre-eminent deciding factor. Some interesting design thoughts are beginning to emerge. Fewer flatted schemes or at least more spacious ones with larger balconies and terraces. But overall more houses, and specifically ones with gardens able to command a significant premium.
BTR – Our clients believe this will still work well but will need much more generous communal and especially external space.
Broadband – In the Zoom era, the fastest speeds as standard, already installed like other utilities, will be expected. Anything less and your scheme will compare badly.
Home offices – Three bedrooms and up, this will just be expected.
Office demand – The ‘flight to flexibility’ has been hard and fast in recent years. But going forwards, there seems to be two schools of thought: there are those who cogently argue that with increased home working, demand will fall. But many companies that have already moved to ‘agile working’ are now saying that there can be no hotdesking and every staff member must have their own work station. The jury is out.
Co-working – Putting aside WeWork which has a whole load of ‘special circumstances pain’ all of its own, Covid-19 is a massive setback for this previous darling of the property industry. Short term pain now, but longer term gain once things begin to settle. But much more space between work stations equals less density which will be a challenge.
Apart hotels – Whilst the hotel sector is all but closed and really struggling, interestingly the apart hotel sub-sector is holding up. Having your own kitchenette and lounge area makes sense.
Logistics – More boom times. Lockdown and Amazon are sadly killing off yet more physical retail, in effect speeding up the very fundamental structural change already underway.
Industrial – The debate has already started on the inevitable push for significant strategic onshoring across various industries’ supply chains now that the vulnerability of a globalised market has been so harshly exposed. Sheds will become more sexy, not a selection of words often co-located in the same sentence!
The pressure to fly less because of carbon footprint was already there, now travel restrictions, quarantine periods and just fear of disease will exacerbate that. With the JR demise of any serious likelihood of Heathrow’s third runaway, BA and Virgin now withdrawing from Gatwick and the smaller regional airports now teetering on the brink, where does all this leave any of the assumptions from the Coalition Government’s three year long Airports Commission or the subsequent Government Review of it? Cue yet another airports review?