Looking at Commercial Property Post-COVID

CLEARLY, THE WINNER throughout 2020 has been warehousing and logistics – due to the massive surgeon online shopping, during the pandemic. And hopefully, that will eventually flow on to bricks-and-mortar retailing.

The other impact of online shopping has been the increased demand for cloud computing and information storage. And in turn, this has seen growth in demand for data centres.

However, you should find quality office buildings continue to perform well – based upon several recent sales.

Even if 20% of staff choose to keep working from home … it will probably only be for two (maybe three) days a week. In addition, internal office layouts all need to be re-configured to ensure proper social distancing.

And that means fewer people will now be occupying the same amount of floor space as before, within the CBDs around Australia.

Convenience for Staff

Some companies may well relocate key departments out into the suburbs – to help their staff avoid the long daily commute.

Already, anecdotal feedback is showing there’s a strengthening of demand within the suburban office market.

Change of Strategy

As companies return to work in 2021, many will rethink some of their operating strategies. And those who own their business premises will look to extract maximum equity from the property, through a sale and leaseback – given the current low selling yields on offer at the moment.

While this will provide their business with a sizeable cash injection – it also allows them to remain in the property on a long-term lease, at an attractive rental.

Whereas being a commercial property investor, you also benefit from having a solid tenant in place for a long period.

Bottom Line: More often than not, you uncover opportunities emerging from every crisis. And to take advantage of them, you simply need to adjust your traditional perspective on how things worked in the past.

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