by Sharina Ahmad
THE Covid-19 outbreak has necessitated the need for social distancing in the ‘new normal’ including the property market.
Social distancing has become more a part of our daily routine especially during the movement control order (MCO) period and has changed the way we conduct business.
In the property market, the rules of engagement have also been changed. Previously, property agents will personally show the property to prospective clients. However, in the current situation, some tours and open houses are being conducted virtually.
Property insights and consulting firm Living Space Ventures Sdn Bhd director Ikhram Merican told FocusM that social distancing makes many face-to-face business interactions impossible but thankfully technology is able to bridge some of these gaps.
“For example, cashless payments in retail outlets are becoming popular and online meetings have become a norm. There are physical constraints which need to be adhered to like maintaining safe distances, wearing masks and doing away with handshakes,” he pointed out.
Ikhram explained that social distancing by itself doesn’t make it all that difficult to close a business deal. As long as social distancing norms are practised, most business deals can be concluded without much fuss.
“Closed-door meetings may be difficult but that challenge is overcome with online meeting technologies. In fact, online meeting platforms like Zoom not only allow video, voice and screen sharing but also provide tools like a whiteboard to help make presentations more effective.
“I’m seeing people doing webinars with thousands of attendees. The cost is negligible. Compare this with having to rent an event space and the corresponding logistics,” he said.
Raine & Horne International Zaki + Partners Sdn Bhd associate director James Tan said while social distancing has taken place, online purchases will increase thus creating demand for courier logistic services and warehouse space.
“The demand for warehouse space will continue to move up and it has helped businesses with storage needs,” he added.
However, Tan said social distancing will definitely have an impact on the turnover and also rental of the properties, the yields and the capital values.
“Huge crowd and turnover, as well as high rental which generally leads to higher capital values. The inverse is true especially in the current situation which may last longer,” he added..
Pros and cons of social distancing
Living Space’s Ikhram said the pros of social distancing is the proliferation of digital technologies. The savings in cost, time, and improved productivity can be huge.
“In the past, I could maybe have four meetings at different locations in a day with not much time to spare for anything else. Now, I can cut travel, traffic, parking costs, and food and beverage costs.
“This allows me to have four meetings with still a lot of time to spare for other things. The cons include: businesses that cannot easily transition to digital methods will suffer. For example, shopping malls, cinemas, clubs, bars, restaurants and sporting events premises will have trouble overcoming the limitations imposed by social distancing,” he said.
He added that the property market is going to be primarily affected by consumer sentiment and the state of the economy.
“If these two factors are positive, social distancing itself presents limited challenges for the property market,” he surmised. – April 23, 2020
