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A director at Raine & Horne Commercial Newcastle has flagged three trends to come off the back of the COVID-19 pandemic.
Steve Dick, director of Raine & Horne Commercial Newcastle, said the knock-on effects of COVID-19 will change the commercial property landscape moving forward.
“The various impacts of COVID-19 on commercial and industrial property markets are the subjects of hot debate,” he said.
“Prognostications from many experts have been coming at us fast and furiously. Predictions have included the demise of strip shopping, the decreasing need for floor space in commercial offices and the ever-expanding demand for online warehouse space.
“Provided the majority of Australia does not slide back into the tight controls of April and May, we see little permanent change to many areas of business.
“That said, there will be some differences, and I have nominated three areas of business change, including corporate travel, office work and the way we shop that will all have implications for commercial property investors.”
1. Corporate travel impacted
According to Mr Dick, the pandemic has taught business executives that they can conduct essential meetings from anywhere in the world, thus impacting the necessity of a meet spot for face-to-face contact.
“Because of COVID-19, the business world has learnt to use technology such as Zoom and locally developed iSee to reduce the need for face-to-face meetings,” Mr Dick said.
“The higher adoption of video technology will reduce the demand for airline travel, hotel accommodation, hire cars and even restaurant meals.
“In turn, this will impact employment opportunities and even landlord returns from their commercial hospitality industry-correlated investment properties.”
2. WFH options gaining popularity
Like corporate travel, COVID-19 has forced businesses to embrace technology to enable their employees to work from home (WFH), Mr Dick said.
“The idea of operating from a home office only works for some staff in some businesses. However, the ease of WFH now makes it a viable choice for more firms and their employees,” he explained.
“Those directly affected by the new appetite for WFH include office landlords as the need for commercial space contracts, as well as cafés and lunch venues who will need to pivot as the density of office workers decreases.”
3. Online shopping picks up further
During the pandemic, more Australians have been shopping online — a trend likely to continue post-pandemic, “given e-commerce global giant Amazon is planning massive ‘fulfilment centres’ in Sydney and Melbourne”, Mr Dick said.
“These huge multi-storey warehouses will be backed no doubt by an advertising blitz to attract more customers to the retail portal,” he said.
“At the same time, as the decline in discretionary income continues, the choices and savings offered by online shopping guarantee the likes of Amazon will continue its push.”