The Economic effect of the Coronavirus is steadily running its full course. The real estate industry, as much as every other industry, has been hit with varying degrees of devastation. It ranges from the inability of realtors to pay up the rent, to disrupted work rhythm and schedule.
However, some assets management personnel think that some parts of the real estate industry are thriving and profiting amidst the harsh conditions.
They pointed out that the real estate investment space is witnessing changes. Nevertheless, the perception of people towards commercialized real estate is still limited to apartment purchase and lease. Apartments and building trading is only a part of a bigger real estate investment space.
It is indicative of a difficult period for these classes of assets (i.e., retail, offices, hotels, etc.), and their conditions are more likely to worsen before it begins to improve. In general, people can expect most of the real estate areas to yield productive results. The other parts are likely to be neutral or less productive.
The reality of Covid-19 impact on real estate
Manufactured housing and single-unit home rentals, which feature on apartment listing websites like CondoMapper.ca, are most likely to survive the scourge of the pandemic.
The pandemic situation is also influencing the purchase decision of people. For instance, the average individual is more likely to buy a home if he/she has to choose between that and an apartment. It is the better option for an office at home and per lockdown directives.
Housing markets are witnessing a more positive outlook than expected, with positively geared property among the beneficiaries, along with telecommunication equipment and data control centers.
Office-laboratory spaces should expect growth, as well. It is because the healthcare sector would attract more revenue from modern systems. Key personnel in real estate estimate that the coming decade would bring focus on healthcare. It is due to the upward evolution in the sector, and the aging section of the population.
The place of tech in real estate
The Coronavirus outbreak did trigger a considerable gain in the momentum of tech trends. Giant tech companies noted that the level of digital transformation experienced in the last two months is equivalent to two years’ worth. It is evident in the increased tendencies for people to access listing websites.
1832 Asset Management had a fund return (taken in July 2020) of -7.96%, which is an increase from the previous -14.17% in the REE (Real Estate Equity) category. On a long-term basis, the revenues had an average of 5.28% in 5 years, and 9.68 percent in 10 years.
Post Covid-19 Future
While the first half of the year brought some positive development to real estate, it is uncertain what happens in the second half. In the event of increased infection cases, asset managers projected that the hotel sector might experience more insolvency. Retail tenancy might face the same fate as well, and funding cost would go up significantly. Ultimately, it is best to be wary of the value and cyclical areas in the sector.