22 Feb What does the commercial property market look like in 2021?
The evolution of the commercial property market is inevitable, however this process has been drastically accelerated due to the pandemic. Thus posing the question, what does the commercial property market look like for 2021? At Da Vinci we believe that commercial property is undergoing a repurposing process this year, as it shifts its focus to make room for the thriving areas such as logistic companies and as it adjusts to the new ‘norm’ of the more flexible business structures within the corporate world.
The following areas should be taken into consideration when analysing the market:
- NEWLY THRIVING SECTORS
While many retail and office based businesses have been pressured to adapt to the new environment and downsize, several sectors have benefited greatly. With the significant increase in online activity as well as the flexible working dynamics, less office spaces are required as the market stretches for more warehouse and storage facilities. The conversion and repurposing of pre-existing offices has further enhanced the residential, fitness and renting storage sectors, which are bound to thrive in spite of the pandemic.
- LOOKING BEYOND LONDON
The business hub, while providing the perfect location London has steep prices closely attached to it. As many businesses restructure and migrate to the online route, the importance of location is put into question. Can expensive property in London still withhold its integrity? In terms of cost efficiency, looking at commercial property outside of the m25 region, businesses can easily save up to 20% – 30% + on their property expenses. Due to these unpredictable times, the move further out could keep many businesses afloat.
- RETAIL SECTOR
Large retailers such as Intu Properties have had to face the harsh reality of losing market presence due to the popular increase in online services and stores. While high street records a significant reduction in visitors, Da we believe that the market still has room for it despite the limitations of adaptations.
- FINDING VALUE IN THE CURRENT TIME
Adapting to the dynamic nature of the environment is always a key element in any market. With this in mind, landlords may need to review their commercial property leases in order to best suit both them and the tenant, especially in these challenging times. Being more flexible and finding a way to work together during these challenging times will not only save the commercial property market but many others as well.
Over the years Da Vinci has built an extensive understanding of the commercial property industry. While this may be unchartered ground for the market, we are confident that 2021 will continue to bring new challenges but even greater opportunities, we just have to be willing to look for them.