Commercial property’s COVID-19 success stories
The coronavirus pandemic has created a time of uncertainty and challenges for Australia’s commercial property industry.
But here’s the good news.
Agents and industry experts say COVID-19 has presented opportunities to freshen their approach and improve processes, while some asset classes have proven incredibly resilient over the past six months.
Investors embrace technology
While some commercial property investors will always want to view potential investments in the flesh, lockdown laws and social distancing restrictions have led many to embrace new ways of engaging with the market.
Burgess Rawson childcare specialist Natalie Couper says buyers are now far more comfortable with online technology, which has created opportunities and in many cases removed the necessity of travelling interstate or overseas to view property.
“Our investor base isn’t just investing in their own state, so the challenge now is how do investors engage with a property when they’re thinking of purchasing?” she says.
“If an investor can’t see the property they can at least experience that through a virtual tour.”
Industrial’s strong performance and popularity throughout COVID-19 has been well documented, with industrial assets consistently dominating Realcommercial’s most-viewed property list.
Powered largely by a huge increase in online shopping and the warehouse and logistics space it requires, industrial assets are well-placed to continue delivering for investors.
Knight Frank associate director Tom Ryan the statistics speak for themselves, with demand remaining high.
“The buzz word is industrial – everyone seems to be buying in industrial,” Ryan says.
“When you look at the Realcommercial stats … for Victoria, industrial has been the most searched property sector.”
Smaller offices stand up
Office workplaces have been among the most impacted during the pandemic as millions of people work from home, but Ryan says certain office categories have performed impressively.
“I think the biggest success story for us is our strata office team,” Ryan says.
“They’ve continued to outperform and do really strong deals. In June alone they did about six deals, so that lower end of the market has really held up.
Flight to quality
The pandemic has given many buyers cause to pause and be more strategic and selective with the commercial properties they purchase.
Couper says assets with long leases that will provide more stability have come to the fore as investors seek to ride out the coming years with some security.
“We’re certainly seeing now through the pandemic that investing in something that’s going to give you long-term, stable income is the focus on people’s minds.
“Even though there have been some really uncertain circumstances going on economically, the market is still performing and there are a lot of buyers out there still looking to transact commercial assets.”