The commercial property market is not broad-based, and that needs to change
In the Business Beyond Covid series, CEOs and other business leaders and experts in their sectors look to the future after Covid-19. What effect has the pandemic and resulting lockdown had on their industries and the SA economy as a whole? Which parts will bounce back first and which will never be the same again? Most importantly, they try to answer the question: where to from here?
The pandemic has come to an economy that was, even before the Covid-19 lockdown, trading at levels last seen more than a decade ago following the 2008 global financial crisis. It’s easy to be worried, if not terrified. It might be hard for us to think back to a pre-Covid-19 world as we all hunker down in our houses, but if we’re honest the SA economy was already in dire straits long before Covid-19 wreaked havoc.
Six months before lockdown office property was already bleeding. Estimates put the amount of vacant office space in Sandton at more than 1-million square metres. Add in a global pandemic and an unprecedented national lockdown, and the prospects for office property look even worse. As a country we have overinvested in big malls and without good returns. People are going to stay away from congregating in large open areas.
Prior to the lockdown, industrial property was already performing better than retail and office, with real growth. In a post Covid-19 market, industrial should remain resilient because it is linked to essential services and supply chains. Coming out of lockdown in a phased approach, manufacturing and industrial businesses will be the first to reignite the fires to kick-start our economy.
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