The Potential Benefits Gained from COVID-19

IT’S TRUE … the economy will suffer from COVID-19. However, the adverse impact will not be felt universally. And in fact, many businesses have never been busier – working 12-hour shifts and some, even around-the-clock.

Those manufacturing basic medical supplies can’t meet the demand. And providers of gym equipment, bicycles, gardening supplies, domestic doors and protective plastic screens are simply flat-out keeping up.

The list is diverse and expansive – with online retailers, supermarkets, Bunnings and Office Works hiring more and more staff … to help service their growing orders.

Looking Forward

Economists are starting to predict a V-shaped downturn and recovery – with expected annual growth for 2021 to be at 6.1% (AFR: 15 Apr 2020, frontpage).

You have already seen the ASX200 improve by around 25%, since its low point in March this year.

Plus, the Reserve Bank is making a concerted effort to underpin the bond market – strongly supporting the government’s $130 billion JobKeeper program.

As such, the commercial property market should respond quickly, once we come out of “lockdown”.

Sure, there will be some affected tenants, who will cause their landlords to share in the pain. However, this is a medical crisis with financial implications … unlike the GFC, where the underlying cause was a collapse of the entire financial system.

More importantly, our banks are in far better shape right now – probably outshining the rest of the world.

As I recently explained to my mentor group … at a time like this, demand for Commercial property doesn’t disappear – it simply gets deferred.

In fact, several members are actively looking for purchases – realising that now is a great time to be sifting through what’s currently on offer. And that way, they are positioning themselves to benefit – as the market regains momentum on the other side.

Bottom Line: Right now, there are good properties, well-let to solid tenants … where the vendors simply find themselves needing to sell.

Therefore, if you have ready access to funds, you may well find yourself in the right place at the right time.

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