What’s Next? Post-COVID Commercial Property Trends to Watch
Throughout the crisis caused by the novel coronavirus, South Africa has had the benefit of learning from the experience of other countries. We look at some of the emerging post-COVID trends in property markets around the world.
Overall, property has taken a beating this year. The first quarter of 2020, which coincided with the spread of the virus in the northern hemisphere, saw a decline YOY in the commercial real estate sector of 5%. The world’s 8 largest listed REITs saw an average decline of 31% for the quarter.
However, some asset classes bucked the trend.
Industrial property increased by 7% internationally and this is a direct result of a booming e-commerce market. Although South Africa was late in opening e-commerce for all sectors, we saw an expansion of online grocery orders and investment in supporting technology.
One of the key focus areas has also been the development of localised supply-chains and manufacturing sites. The interruption of International delivery caused by Covid-19 has brought attention to economies worldwide of the need for local supply and manufacture of goods sites and shift away from dependence on international suppliers.
President Ramaphosa has been hinting at aspects of South Africa’s proposed economic recovery strategy and reference has been made to a shift to locally produced goods to benefit local businesses as well as Infrastructure development. Infrastructure development has been put on the table as a potential source of employment and could also have a knock-on effect in terms of the construction industry.
The mixed-use property market saw the biggest rise worldwide with a 15.6% YOY increase in demand for purpose built rental accommodation. In South Africa, mixed-use developments have been slowly increasing in popularity with all the practical reasons around these developments coming to the fore, namely: live close to where you work and are entertained, convenient lifestyle and convenient and access to shops. Key areas attracting mixed-use development include Sandton, Midrand, Durban and the Bo-Kaap.
Another emerging trend is green buildings. Covid-19 has drawn attention to the environment and a swifter shift towards environmentally sustainable solutions. While there is no real logical connection, with the worldwide nationwide lockdowns, and people casting their eyes on nature it would seem that mankind has developed a greater appreciation of nature and a tendency towards sustainable solutions. We can expect an acceleration in the trend towards everything green in property.
Contact Sonia on 084 555 5636 or email her at [email protected] for more information, on a mixed zoned development land opportunities in Sandton and Rosebank area available at discount to the market value.