Sometimes I get that look when I say “post COVID or beyond COVID”. I need no reminding that we are very much still battling this famous global pandemic that goes by its “funky” name- COVID 19. Indeed, the use of the word post or beyond is by no means an assertion to mean we have dealt and gone past the pandemic, it is used to capture a moment in time and what happens beyond that moment, in other words, how have we been affected by the pandemic and how are we adapting our lives going forward. With that clarity made, we would concern ourselves with our subject matter, real estate, and what the outlook is like going forward with a special focus on our local market, this side of the globe.
Before we look at the impact of the pandemic and how it has affected the local terrain, here is snippet into what is happening at the Global level. Office and working models have seen a great deal of rethinking. Office layouts are changing considering that a number of employees are and can work remotely. Use of office stations is seeing a decline while connecting virtually for meetings has seen a significant upward trend. This trend will influence investors decisions per new fit outs or retrofitting to reflect the times we are in.
The pandemic further exposed the frailty of our infrastructure and their inadequacies to handle global pandemics of such nature necessitating renewed impetus to create retail and office assets in more sustainable ways or even retrofit to make them both functionally and branding wise a bigger draw to investors. Then there is the drive towards achieving net zero to make buildings self-sufficient as much as possible to generate their own power or process their wastewater.
Technology has become a big disrupter and increasingly, property investors are becoming savvy and discerning and in the post COVID world, their purchase decisions will be dependent on buildings being equipped with touchless technology and intelligent air quality monitoring devices that will sell at a premium. Big data analytics is disrupting the way buildings are designed, constructed, monitored and maintained all with the aim of sanitizing the construction.
LOCAL SECTOR OUTLOOK
In the Ghanaian context, I will say the market is at transitory point with a rethinking of the traditional modes of business and housing delivery due to the impact of COVID-19. The pandemic has significantly impacted activity within the real estate sector and the market players are finding innovative ways to develop new business, beyond business as usual. A critical look at the various sub sectors all indicate a changing landscape as follows:
The situation in this sector is an interesting one of adaptability. While there seems to be an excess supply over demand at the high end of the market, (luxury apartments and townhouses in prime areas mainly) the low to mid end of the market (single storey or bungalow style houses) is still very much vibrant, as a large chunk of the national housing deficient, estimated to be over 2 million units, is located with this end of the market.
Developers at the high end of the market are increasingly developing smaller units of studio, 1 bedroom sizes to make them more affordable. Looking ahead and as estimated by UN-Habitat, Accra’s population alone is projected population growth from 2.5 million in 2011 is expected to reach 4.2 million in 2025, which clearly shows that the deficit isn’t lessening anytime soon.
Though that sounds gloomy, there-in also lie opportunities for development of houses and increasing the stock. Most of the stock is being delivered by the private sector while recently, the government has through a number of Public Private Partnerships, initiated affordable housing projects.
Within the retail space, made up of shops, eateries, malls etc., both landlords and tenants are rethinking their business models. Those in the fast food industry for instance have had to resort to take-outs and delivery services in addition to in-sitting. Landlords are having to offer some rent concessions just to be able to keep old tenants.
With respect to office spaces, the demand is on the decline as there is a shift to remote work from home. Occupancy levels have also taken a dip, especially for serviced offices whose clients, short stay expats and consultants with transitory business needs are resorting more to online meetings rather than in person meetings, significantly affecting the lead generation funnel.
With respect to hospitality, hotels especially have been hard hit with those that previously had 80 % occupancy rates now barely scratch 50% occupancy though there is a steady return a situation mimicking the old normal.
There is a curious case with regards to warehousing, in that although land borders have been closed to human traffic, the ports are still seeing some activity allowing for import and export of commodities essentials like hand sanitizers etc. Also with online purchases witnessing a boom, it is estimated that there will be renewed appetite for warehousing or storage to stock up to meet growing demand from customers.
So folks there we have it a quick peep into global and local trends as we navigate COVID-19 and the future of property investment. We love to hear from you, do share your comments, requests and any enquiries and we will be happy to connect.
The writer is the Executive director of Yecham Property Consult
& Founder of Ghana Green Building Summit.
Email: [email protected]
LinkedIn: Cyril Nii Ayitey Tetteh