Dear business associates, dear market participants,
The coronavirus crisis has now had us in its grip for over 8 weeks. While we struggled with technical difficulties and the unfamiliar situation in the first few days, it quickly became clear how versatile and adaptable most people are. Working from mobile workstations has become the norm. Face-to-face meetings are being replaced by video chats or phone calls. Time is saved by traveling less and is often invested wisely in the company or family. Nevertheless, many investment decisions have been delayed or frozen altogether. In the HR sector, important positions are being filled only hesitantly and planned investments - both in business operations and in the real estate sector - are being postponed. A few market players are taking advantage of the situation and are entering the market particularly aggressively. Overall, it is very exciting to observe how the various protagonists are currently assessing the situation and what is expected for the future in the real estate sector. They have all certainly been affected by the crisis to varying degrees.
The tenor of many conversations is:
- Logistics and food retail will continue to boom
- Non-food retail or retail for non-essential items will recover - but it will take a while due to hesitant consumer sentiment and the allocation is difficult to predict (will bicycles be bought more than leather sofas?)
- Gastronomy and hotel are viewed very critically and evaluated cautiously
- Industry remains exciting, as production will only take place in the “home office” to a limited extent. Supply chains may be centralized again and this could lead to a new boom
- Office is assessed as stagnating or even declining sharply, as the currently tested model of mobile workplaces is obviously working and space costs are the strongest expense driver after personnel costs
- Residential property is valued very differently from region to region - there will continue to be pressure and demand for residential space in the Big Five - investment decisions by private individuals will increase again hesitantly
Overall, the entire real estate industry is undergoing an unwanted change process and will have to think about a sensible business strategy as a result of the situation it has experienced. Such crises are also predicted more frequently for the future - whether they are globally distributed, as in this case, or whether they take place in regional environments that can nevertheless influence economic processes.
Ideas are now needed and some of these need to be implemented very quickly. For example, rent-free periods are negotiated in order to extend the current rental agreement ahead of time. The implementation of hygiene regulations must be taken into account and implemented in the management of services relating to the property. Documentation and reporting are being expanded to include new aspects. Pandemic plans are no longer just theoretical; in future, they must be kept available and checked for feasibility. This requires certain management processes and, not least, the storage of hygiene articles. Dialogue with politicians must be stepped up even more than it has been in the past.
Cotecda GmbH is prepared for these requirements and is happy to support you in dialog on all issues arising from the situation.Please feel free to contact us.
Stay or get well and continue to be patient - the economy has risen very successfully from every crisis so far. I firmly believe that we will succeed this time too,
Yours, Carsten Wesner