As a result of travel restrictions and stay-at-home orders, we have been forced to become more flexible in the way we work and to really employ the various forms of technology at our disposal in order to continue servicing our Clients. Physical meetings have been replaced by Zoom and Microsoft Teams, and we are now in many cases, relying on drone technology to assist us in our property site inspections, which we all had been conducted physically pre-COVID.
Our clients are very keen to understand the short, medium and long-term impacts of COVID-19 on the wider real estate market and their projects specifically. Consequently, our analysis dives deep into the implications on consumer behavior, preferences and trends which are expected to impact demand for all asset classes moving forward.
From a market perspective, it is clear that 2020 has accelerated a number of key trends which we were already starting to witness globally, such as the growth of e-commerce and adopting more flexible living and working arrangements. The outbreak of COVID-19 has triggered a shift in mentality, for both employees and employers and supported by the technological development we will not fully go back to the previous, inflexible “work from office setting” rather than adopting and evolving to a hybrid approach. We expect these trends to continue into 2021, highlighting the importance of delivering and providing the right type of real estate which responds to these shifts in consumer behavior.
Furthermore, as health solutions become more prevalent over the next six months some semblance of normalcy will return to the market with some sectors recovering faster than others. In the office market we expect flexible working trends to outlive the COVID-19 era. The hospitality sector will remain under pressure generally for a longer period with some segments like business tourism restructuring and recovering at a slower pace. In the retail sector an acceleration of embracing technology, data analytics, and a focus on tenant landlord relationships will be front and center.
We expect the UAE and Saudi Arabia to remain key focus areas across all service lines moving into 2021. In the case of the UAE, the market fundamentals are looking positive, supported by the Government’s quick and assured response to the pandemic as well as the range of new initiatives and reforms, which we expect to support future investment and further bolster market confidence.
In Saudi Arabia, ambitious plans for new investment and real estate development in line with Vision 2030 are also expected to support economic growth, creating various opportunities in key sectors, such as hospitality, entertainment and logistics.
Despite the positive headwinds which we have witnessed locally in recent months, we expect there to continue being a sense of uncertainty in market evolution going into 2021. From a client perspective, we aim to guide our clients in these times by leveraging on our deep experience in the market as well as the robust real estate platforms we have developed over more than 15 years in MENA. More than ever, it has become our priority to provide the best possible advice for our clients to ensure that they are able to maximize the value of their real estate developments and assets moving forward.
Will we ever go back to pre-COVID-19 ways of operating?
We believe that, to some degree, changes witnessed as a result of COVID-19 may be here to stay, most notably the idea of more agile and flexible workspace. However, the traditional office will not be erased from the picture moving forward. What we have found is that despite enjoying the flexibility that working from home allows, employees are still craving the human element of working in a central office location – spontaneous catch-ups with colleagues, physical brainstorming sessions and the ability to create and strengthen relationships across the organization. With this in mind, the purpose and the shape of the traditional office is expected to shift, with a greater focus on providing a space which fosters collaboration, creates a great employee experience and allows team members to feel part of a bigger culture and company ethos.
Technology and innovative thinking
From our perspective, data and analytics platforms are key and will continue to transform the way we operate and the way we service our clients. CBRE has developed an extensive suite of tech applications which help landlords, occupiers and investors better analyse, manage and improve the performance of their assets. As technology and big data continue to grow across the globe, more and more of our clients are interested in leveraging on the robust capabilities of PropTech across all real estate sectors.
Ensuring stability through 2021
Providing infrastructure is key in difficult economic times and government entities, such as the RTA in Dubai for example, have done a fantastic job by doing so and supporting the construction and real estate industry in the long term.
Local governments can also influence the real estate landscape quite significantly by changing laws and regulations. For example, managing the building permit process has a direct correlation and impact on real estate supply situations.
Finally, managing cashflow is always a challenge in uncertain times. In this respect, Government support in the form of stimulus targeted at the wider industry and supporting timely payments will also be welcome.