How Covid-19 is Revolutionizing the Real Estate Market
Covid-19's impact in the world is far from ending. This is something that in the early stages of the pandemic was highly undervalued. The common sense around March was more around the immediate impacts such as the abrupt decrease in consumption, the affected sectors such as retail and commercial and the overall change in how we live our everyday life. As of July, the panorama is quite different. Many sectors have concluded by now that the pandemic has become a “bridge” for a revolution in how communication, technology and functionality will be done production wise.
The pandemic has brought a new concept of distance and togetherness. Social distancing is a top priority as of now, since it is one of the main ways of mitigating the spread of the virus. Now, despite people having to remain away from each other, the world has seen that distance has not compromised togetherness - this is where technology comes into play. More and more we are seeing reports from workers all around the world that even though they are working from home, it feels like they are sitting right next to their team. Platforms such as Zoom and Skype have redefined how work is done, and in many cases even resulted into a more schematic, efficient and productive work style than before. It most certainly has made us conclude that the traditional workspaces are no longer as needed as before - our home comfort and highly capable computers and platforms provide us with as many tools as we need to communicate and succeed, which translate into a revolutionizing change regarding how everyday life is done.
Such a change is subject to radical new strategies of sales, human resource management, productivity, service speed and quality of life. This is why every single sector and industry will have to find how to capitalize on this opportunity. Companies such as Uber Eats and Netflix are now swimming in money pools; this is because the current conjecture has resulted into people staying much more time at home, leaving them to rely more on entertainment and also substituting the habit of eating out by asking for a meal through an app. The main thing here is that our homes have become much more than where we live and sleep. They have become our office, our main place of entertainment, our place of comfort and most of all, where we spend most of our time.
The Real Estate sector is, in this way, obligated to follow this new trend. Having spoken with many of our investors, it is clear that despite commercial and retail investment is still going strong (while hotel assets are receiving a somewhat apprehensive approach), residential and logistic assets are becoming one of the main types of assets to invest on.
According to American statistic firm OptinMonster, “Online shopping is growing so fast that the global online shopping market size is predicted to hit 4 trillion in 2020. And in the US alone, we're expecting to have 300 million online shoppers in 2023. So far, 69% of Americans have shopped online, and 25% of Americans shop online at least once per month. The majority (59%) of these shoppers bought clothing items, and 47% bought their first item on Amazon. But Americans aren't the only ones who shop online. People all over the world understand the benefits. According to Invesp, the countries with the leading average eCommerce revenue per shoppers are: USA (US$ 1,804), UK (US$ 1,629), Sweden (US$ 1,446), France (US$ 1,228), Germany (US$ 1,064), Japan (US$ 968), Spain (US$ 849), China (US$ 626), Russia (US$ 396), and Brazil (US$ 350).
Now, all of these companies need to have stock ready for shipping, which is why logistic investment is such a big trend. Location, size and accessibility are the three main priorities of these assets. This, paired with the ever- growing demand of quick delivery times and fast service, it is sure to result in the development of many more logistic parks.
What about residential assets? Being our expertise, TOTE SER is registering, through its investors, a higher interest in residential properties that are highly functional, comfortable and versatile. Over the course of the last 3 months, JLL Real Estate has stated that they've had an increase of 23% in searches for houses with rooftops/terraces. The necessity of outside spaces in our homes is more and more becoming one of the things that are sure to achieve a considerable future appreciation. On the other hand, versatility regarding space optimization is also a top priority - a simple kitchenette can be a cooking and eating place, but also function as a boardroom by day and host a client cocktail party at night. The traditional concept of space optimization, being our specialty, is now being even more valued due to the high costs of the square meter, resulting in properties being more and more versatile while counting on functionality, comfort and well-being. Home automation is also becoming a big trend in home development, solely because it brings a new sense of comfort, accessibility and control over our homes.
The necessity of spaces where we feel well in, combining aesthetics and functionality, is bigger than ever was. The question here is, our success will be dictated by how we embrace these new changes, culminating into better knowledge in creating the maximum well-being for our investors through the fast and lucrative sale of their properties.