Brexit, coronavirus and real estate
FOR the last four years the UK political climate has been dominated by Brexit, with newspaper and TV journalists feasting on the debate.
The lack of clarity surrounding Brexit has delayed decision making and has undoubtedly had a detrimental effect on our economy.
But since the turn of the year, whether you agree or disagree with the Brexit vote, the fact that a decision has been made and that we now have some political stability both locally and nationally, has helped boost interest in the commercial property market in Northern Ireland with new entrants once again looking at our market. Just as we are starting to get a bit of momentum in our market the next challenge arrives - coronavirus.
Coronavirus, or Covid-19 as it has become known, originated in China but has now spread across the globe. The World Health Organisation has declared it a global health emergency and governments in many countries are putting in place action plans to respond to the ongoing outbreak. Italy most notably is in lockdown and cases have now been reported here - both north and south of the border.
The coronavirus spread and response remains an evolving situation due to the unknowns surrounding the duration and extent of its spread. Its impact is also hard to predict. Inevitably in the short term there will be delays in decision making for leasing and investment as well as a short-term reduction in demand.
We will know more about the potential longer-term impacts on real estate when we have greater clarity on the extent and duration of the outbreak, and the related response from consumers, businesses and government.
We are in uncharted territory at the moment but the advice to those in the real estate sector must be to try and be as prepared as possible for further disruption by checking the terms of contracts and lease agreements which may be impacted by closures or delays and enter into a dialogue with suppliers, customers and tenants to see what business continuity plans are in place.
Practical steps include; reviewing business continuity plans and IT systems to ensure connectivity and capacity, encouraging remote or home-working for employees if possible, encouraging staff to cut down on travelling to meetings unless they are particularly necessary – even between their own offices, arranging for laptops to be taken home on a pre-emptive basis, keeping up to date with the latest guidelines issued by the WHO and UK government and providing enhanced cleaning measures to frequently touched surfaces.
As for real estate, history tells us that those involved in real estate normally plan to hold property as long term assets and therefore investments in property are well placed to weather isolated shocks to the economy, wherever these may come from.
:: Declan Flynn is managing director of Lisney in Belfast