There are so many unknowns about the ways in which the Covid-19 pandemic will shape our world in the coming months and years but what it has highlighted are the strengths and weaknesses in the global and UK economy and their implications for the commercial property sector. In its latest white paper, property consultancy and chartered surveyors Bruceshaw examines the macro and micro economic challenges that will shape the property sector for many years to come.
Published as part of its series of Voice papers, the report suggests that this unprecedented crisis has impacted society and the economy like no other; simultaneously connecting and dividing the world by highlighting the strengths and weaknesses across the globe, the different strategies employed by governments and companies alike. Bruceshaw is a UK based firm that specialises in quantity surveying, cost consultancy, project management and health & safety.
Key issues raised in the report include:
Globalisation vs Nationalism
For the past two decades, we’ve enjoyed the benefits of globalisation whether that is as consumers by giving us access to a wider variety of goods or as businesses, through access to bigger markets and in some cases cheaper labour.
“Will there be a different view on what the UK needs to provide for itself and a review so that we are potentially not as reliant on getting products, materials and services from quite as many countries as we have been?” says Bruceshaw Managing Director Rennie Dalrymple. “Questions may be raised about how far globalisation has gone and whether it needs to be reined in a little.”
If it encourages innovation and helps develop the localised industry for a more resilient economy in the longer term then that might not necessarily be a bad thing.
“If you stick your head in the sand, then you’re going to be in difficulty. But if you know it’s coming you can positively manage your business, be creative in delivering work, finding ways to be more efficient and productive so that you can trade through the cycle,” says Bruceshaw Director Paul Body.
Well-run businesses with strong balance sheets and good governance should have a head start in riding out this storm but those who don’t will undoubtedly have a tougher time.
Before COVID-19 some sectors were already struggling – retail being the obvious example. The pandemic has served to accelerate the weaknesses within the sector with a number of administrations already announced – and more likely. The future role of the High Street was already under scrutiny but it will need to evolve faster if more retailers fail.
Property Industry Innovation
Delivering enough houses to meet demand, particularly affordable housing, was already a challenge but the property industry has been rising to that challenge. The pandemic simply means the industry will have to be more resourceful.
While lockdown may well accelerate the demise of weaker businesses and slow down development, the silver lining is that necessity speeds and breeds invention.
“We should and could come out of this looking at better, more efficient ways of doing things using modern methods of construction, robotics and digital technology etc,” says Body. “It may also be an opportunity to streamline the planning process – making development efficient from start to finish.”
Priorities for the built environment may change. ESG – environment, social and corporate governance – was gaining traction, as local authorities and some investors and developers were starting to look at the broader impact of development on the environment and who ultimately benefits from it.
Lockdown is testing the built environment. There won’t be a quick fix to this but the industry is resilient and will find a way through because that is the nature of what we do.
During the lockdown, the report shows how we have all felt the benefits of being able to work flexibly. From improved staff welfare, to increased productivity and office efficiency.
The speed of delivery on projects has inevitably slowed down because of the challenges presented by social distancing and remote working, so clear communications and managing expectations have been key. However, challenges present opportunities to discuss more effective ways of doing things.
Our next step, if working from home is going to be a more permanent consideration, is to ensure that we all have an appropriate home working environment, enabling employees to work better.
Image by Pierre Blaché
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Source: Work Place Insight