The real estate industry has been extensively affected by the Covid-19 Pandemic since its outbreak in early 2020. The Pandemic prompted a broad change in the use of offices, leasing, hotel accommodations, entertainment venues, apartment renting, tourism, student housing, and more. With the heavy restrictions imposed on companies with large numbers of employees, and the temporary lockdown on schools, as people are being forced to stay at home, there has been a drastic fall in the statistics of apartment renting and lease.
The Corona Virus eliminated some trends, such as business/leisure travel, tourism, tourist-oriented retail, vacations, and brand activations.
SMEs and local companies folded up, vacating their shops or office spaces; and commercial activities were suspended. Particularly In Nigeria, the student housing market hit its lowest as students went home to their families; first as a result of the pandemic, then followed closely by the year-long ASUU strike.
Some of the trends to be highlighted are not new; although the Pandemic accelerated the adoption of these existing trends, it did not create them.
Working from home
Work from home or remote working is an age long concept. Although the Pandemic shed more light on its efficiency, it has always been in existence. Social distancing and the ban on social gathering has forced companies to reduce their office footprints and adopt the use of virtual platforms like Zoom for online meetings, conferences, webinars, and for effective communication and collaboration.
These newly adopted trends have increased the use of satellite offices and invariably reduced the percentage of office space renting and lease. Individuals are also beginning to redecorate their home spaces to facilitate a more conducive work from home experience.
Rise of e-commerce sector
Digital marketing and e-commerce reached its highest surge in 2020 thanks to the Pandemic. A lot of companies and individuals are cashing into the idea of e-commerce retailing considering its fast, cost effective, and more importantly, a huge shift from physical stores. With the online retail market blooming, the need for physical spaces has dropped. E-commerce is growing rapidly, and it calls for a special focus of understanding with regards to the changing patterns in the use of physical spaces.
Decline in student housing
The demand for purpose-built, privately owned student housing experienced its worst decline last year, which will still extend through 2021 as schools all over the world have ramped up their virtual learning. There was zero demand and need for school hostels, and private off-campus apartments were vacated as students went back home to their families.
Change in investor activity
Since the outbreak, real estate players have been hit hard across the value chain. With construction delays, stoppages, and the drastic reduction in operational income, property owners and real estate investors are beginning to focus more on supporting existing holdings rather than committing to new projects and other capital improvement plans.