This key property sector trend could be vital to its recovery from the COVID-19 crisis
There has been no shortage of doom and gloom in the property market thanks to the symptoms brought on by the coronavirus pandemic.
With the government-enforced lockdown having brought most property activity to a grinding halt in recent months, many real estate analysts are predicting the sector will be hit hard and may not begin to recover until 2021 at the earliest.
It is never easy to predict the future, and that is especially true at the moment, but we are already seeing a positive new trend emerge as people begin trying to adapt to the ‘new normal’.
Rivals are setting aside their differences and trying to work together.
Major players in the market who had previously been competing against each other when times were good are now looking to pool resources and share risk to mitigate the impact of the crisis.
We are already seeing a rise in collaboration between companies. Most clients and contacts are raring to get going again, indeed some didn’t ever stop, and there is a willingness to get back to business as usual as much as possible and as soon as possible.
It is very similar to the reaction following the financial crisis in 2008. Whether driven by a desire to share the risk; the need for pooled resources to increase firepower; or a recognition that two minds can be greater than one, when times are tough and innovative solutions are required interest in joint ventures and other forms of collaboration tends to increase.
Already it is refreshing to see companies sharing information, opportunities and working practices with their competitors more than ever before.
With the implementation of social distancing measures expected to continue for some time the demand for city centre office space is likely to drop, and properties will certainly need reconfigured to suit new requirements.
However, there has also been a spike in demand for logistics and warehousing facilities due to the sharp rise in goods being bought online and needing to be distributed quickly.
Housebuilding is also showing some early signs of resilience. Despite the lockdown, housebuilders are continuing to take reservations and online searches show interest in moving home remains high.
A significant increase in the rate of unemployment or the tightening of the availability of mortgage lending are the biggest threats to the housing market, but with construction sites expected to open in early June in Scotland, while sales rates are likely to be down, housebuilders are hopeful of having both supply and demand going forward.
With so much uncertainty and the potential threats out there, to make the most of the potential opportunities; developers and property owners may need to think creatively to take a fresh look at the market and work with others to make deals happen and deliver development.
Acting for a wide variety of clients and plugged into the market at all levels we can assist with introductions.
Reach out to us if you have opportunities for which you are looking for a partner or are in a position to join forces with someone else to bring forward a deal or a development.
This spirit of collaboration and cooperation can lay the foundations for deals to be done as the property market starts to move forward again – something that is in everyone’s interest.
19th August 2020
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14th July 2020
We explore the impact of the Code of Practice for commercial property relationships.
23rd June 2020
We look at how resilience and collaboration will help the housebuilding market exit lockdown.