In 2020, COVID-19 took the world by surprise, including the unprecedented length and severity of the pandemic. The toll on the economy and the workforce is clear for all to see. Though vaccines are being rolled out across the country, with the emergence of a new strain of the virus and the resultant government measures, the year ahead will be challenging. However, many of us hold great expectations for 2021, especially in the second half of the year. Many are hopeful that a successful rollout of COVID-19 vaccines will enable us to emerge from this state of continuous lockdowns and return to a state of ‘normality.’ As we prepare to return to the office in the coming months, is now the right time to dust off those deferred commercial real estate plans?
A squeeze on cash flow, underutilised workspace, and a successful and positive adjustment to remote working are just a few factors that led many businesses to defer property decisions in 2020. The pandemic caused most companies to go into survival mode, meaning that searches and negotiations for new office space were far from a priority. However, the delay of such decisions means that occupiers now face looming deadlines in 2021 on lease expiries or break options.
Accordingly, DeVono has released a selection of 2021 predictions for the commercial property sector. After a year of enormous change and changing market dynamics, we believe 2021 will be a year of opportunity and choice for occupiers. You can read our predictions for the office market in 2021.
Every organisation should seize this moment to implement the learnings from the COVID-19 pandemic, analyse their present and future business objectives, and set about building and delivering a real estate strategy that supports rather than inhibits their business’ goals.
Our ‘Commercial Real Estate Roadmap’ is a handbook to help all businesses devise their future commercial real estate strategy, both during and after the COVID-19 pandemic. In this handbook, we outline how business leaders should approach commercial real estate decisions based on a short, medium, and long-term strategy using our ‘Return, Revitalise, and Transform’ model.
Throughout the pandemic and on an ongoing basis currently, DeVono helped clients overcome specific challenges – be it advising them on short-term rent mitigations, carrying out ‘Return-to-the-Office’ risk assessments, or crafting holistic real estate strategies to complement their business goals.
We believe that a window of opportunity has opened for businesses that have imminent space needs and those that have longer-term requirements. Securing a preferred option at today’s preferential rates (rent and incentives) for space that is not needed for another six months, one year, or even several years away could be significantly beneficial – for the occupier and landlord.
Pent-up demand could see a larger number of businesses than usual vying for a similar quality and type of space at the same time. Some occupiers with active searches have already found increased difficulty in matching needs with existing options. Widening the tenant pool will lend further pressure on such decisions. It is time for occupiers to act.
Dusting off real estate plans, whether to confirm decisions already made or to create a strategic plan for growth for the next couple of years will prove invaluable not just to business operations, but from a cost perspective too.