A future of reduced property values, new working practices and firms not re-opening their premises, was spelt out in the latest online UK Proper Social event.
Our Reading Social – Ask the Experts event on Tuesday, June 2 put Andy Jansons, managing director of Jansons Property, Daniel Lampard, senior director with Lichfields and Adrian Powell, director of Active Workplace Solutions in front of an online audience of around 80 to take questions from UK Property Forums managing director Matthew Battle.
Mr Jansons said, while it was too early to be sure how markets would emerge, agents have been pricing properties and land at pre-Covid prices. But he added: “My own view is that, with some of the assets we are involved in – we are involved in valuation processes – we’ve seen a reduction. There’s a reduction of 20 per cent in the value of some of our assets in the residential sector, for instance.
“I’m not saying the market’s going to fall that much but if you look at the Nationwide Building Society report today, they reported a 1.7 per cent fall in May in terms of house prices. And, if you put that in terms of an annual trend, you are looking at 10 per cent or more.”
He believes a similar trend is likely in commercial markets.
Sectors most likely to flourish, he said, include housing and care where demand remains despite the effects of Covid-19. Supermarkets continue to provide security.
Mr Jansons said: “Food retail has been a big winner. We see long leases in the discount food sector particularly, the Aldis and Lidls.
“There’s a flight to quality, long term income and good covenants.”
Daniel Lampard from planning consultancy, Lichfields said numbers of planning applications submitted in April were down year-on-year by 20 per cent but virtual planning meetings had proved successful, allowing councillors to make important decisions from the comfort of their own homes.
He said the economic benefits of developments may now be given more emphasis.
He said: “It happened in 2009. The Government brought out a ministerial written statement to say it’s important that planning applications had full regard to the economic benefits and I see that coming to the fore, going forward.
“The Thames Valley is a very successful economic area. I’ve sometimes gone to committees and thought that members haven’t appreciated the economic benefits, the job creation, the new areas of employment being brought forward (in new schemes) and, in a world where sadly it looks like we are likely to be facing rising unemployment and suchlike, I really think those matters will jump to the forefront of their consideration.”
And he reported that in West Oxfordshire estate agents are already talking of a return to the days of achieving sales at above asking price and sealed bids.
Adrian Powell from Active reported an 80 per cent drop in revenue directly from the effects of Covid-19, a loss of around £1.5 million. However there was an increase in small requirements as employers kitted out home workers and PCs were swapped for laptops.
Some occupiers are now allowing their staff to work in separate teams, one on Monday and Tuesday with the other working Thursday and Friday with a big clean on a Wednesday.
But Mr Powell said: “We are seeing an awful lot of businesses saying ‘we don’t need to go back to the office at the moment. We’ve enabled our staff, we’ve shown that people can work from home’.
“I know this is enforced homeworking at the moment. But they can do that for a number of months and can postpone this re-entry to the office. And I’ve seen a number of big occupiers say they are going to wait, possibly until the new year.”
He said a big client at Green Park is spending £2m on Covid alterations while a client in Weybridge has put all non-essential work off until 2021.
And one travel business, which has two lease renewals in the next six to nine months, saw a 97 per cent drop in revenue.
Mr Powell said: “People will not go back to those buildings . Those buildings will be shut. They will be cleared and the people made redundant.”
The next UK Prop Social event takes place on Tuesday, June 30 at 1.30pm. Email: firstname.lastname@example.org.
Image (clockwise from top left): Andy Jansons, Matthew Battle, Daniel Lampard and Adrian Powell.
© Thames Tap No 213 (powered by ukpropertyforums.com)