It’s evident that the real estate sector will change during and post-Covid19. In many ways! Comparing notes lately, a colleague for instance mentioned how he has been trying to move his stock of property. He even offered generous price concessions. But no one jumped at it, he mentioned. I advised that markets behave so in uncertain environments. Most prospective buyers focus on sheer survival hoping that their cash reserves will last the period. They are therefore unlikely to invest available cash on property, whatever the bargain. And this trend has been gradually slowing down the real estate sector lately. This will be felt by those who had pending commercial and residential properties to move, along with those who held urban or rural land for sale.
The market will take time to recover post-Covid19. Uptake will be sluggish as cash levels will be low, with prospective investors having eaten into their reserves. Others will have changed priorities. Many may want to first rebuild their cash reserves, before considering capital investments. Moreover, the season has taught unexpected lessons. After long periods of working away, many companies may just have realized that they could do with less office space. Meetings, critical decisions and the cascading of operational instructions have been happening virtually.
The work-from-home call, which started off as a survival strategy, may have triggered unexpected trends for institutions that have hitherto embraced office-centered business models. In Kenya’s jam-strung cities like Nairobi and Mombasa, time saved and the freshness of working out-of-office will tempt. This could see businesses scale down on their space needs, and subsequently influence decisions for new businesses hence triggering a net reduction in the demand for commercial space. Real estate groups within this niche, particularly in Nairobi’s central business district and its suburbs, will need to plan to accommodate this likely trend.