Last week, we sponsored a thought-provoking RICS webinar looking at the impact of COVID-19 on real estate in Europe, featuring expert speakers from across the industry. Here, we focus in on some of the key themes that were discussed.
Offices: room for a re-think
With government-enforced lockdowns in place across much of Europe and most companies adapting to remote working as the ‘new normal’, this experience is set to have a huge impact on office design, typologies and even locations.
In the shorter term, when the time comes for re-opening offices while the virus is still around, we could see certain office typologies – such as flex offices and co-working spaces – being avoided or adapted to mitigate person-to-person contact. Frank Hovorka, Director of Technique and Innovations at the Federation des Promoteurs Immobiliers in France, suggests that companies may also consider temporary or partial relocation out of cities to shield employees from densely populated areas.
Looking to the longer term, office design may evolve to provide smaller and more flexible workspaces as businesses embrace remote working more readily – after all, many are inadvertently playing out the largest working from home experiment ever right now.
Hotels: customer experience will reign supreme
We’re seeing a decline in Europe’s hospitality industry, with hotels being closed during lockdown. But many remain hopeful that the hotel sector will make a smooth recovery – Heinz Wehrle, Managing Partner at Horwarth HTL in Switzerland, notes that some 70% of hoteliers expect to recover within six months of reopening their doors. During this recovery process, we will likely see hoteliers collaborating to overcome challenges, rather than competing. And the biggest success stories will be the hotels that focus on customer experience throughout and following the crisis, with people prioritising quality over price.
Landlords and tenants: weathering the storm together
Susanne Eickermann-Riepe, Partner and Head of Real Estate at PwC in Germany, reminds us of the importance of showing solidarity across the real estate industry during these uncertain times, especially between landlords and tenants. Showing empathy and building trust is key: people will remember how you treated them during this time of uncertainty. Landlords and tenants should bear each other’s interests in mind when making business decisions, offering up pragmatic and innovative solutions to maintain a good relationship and weather the storm together.
This is particularly pertinent in the troubled retail sector, where Simon Orchard, Independent Senior Advisor for Basico Real Estate, suggests communication between landlords and tenants at the point of stores reopening will be essential for the survival of small and large retailers alike.
Prioritising the future
Henri Vuong, Director of Research & Market Information at INREV, the European Association for Investors in Non-Listed Real Estate Vehicles, notes that ESG funds are holding up better than others in the current climate, and she expects we will see many funds looking to maintain and increase their ESG commitments in the coming years. This forward-thinking approach is likely to be adopted across the industry, with businesses looking to develop their future strategies as a priority.
As well as this, Simon Rubinsohn, RICS Chief Economist, suggests we may see a surge in investment in technology and innovation once the COVID-19 crisis is over. A retreat in globalisation is also possible, with companies perhaps choosing to focus more on building local supply chains to help mitigate the impact of global crises in future.
The way we live, work and play may not be the same again – or at least not for the foreseeable future. This will inevitably have an impact on how we manage our buildings, and the industry must join forces to navigate a ‘new norm’ together.