2020 – A Year of Disruption & Confidence in Corporate Real Estate
January 20, 2020

A Year of Disruption & Confidence in CRE

2020 will welcome major shifts and a highly anticipated shake up in Commercial Real Estate (CRE). It’s ‘do or die’ for industry players with the need for adaption, diversification and innovation at an all-time high.

Following a grim 2019, the cautiously optimistic outlook for 2020 has the industry breathing a small sigh of relief. CRE was under major pressure last year with many companies downscaling or opting to renew rather than relocate. In addition, landlord incentives to attract and retain tenants had the industry battling it out and losing significant margins. “We saw companies renewing rentals at 20 – 30% discounts” says Galetti CEO, John Jack.

A survey hosted by Galetti towards the end of last year underpinned this statement, with 71% of respondents saying that they expected a 5- 20% reduction in their property rentals due to the economic downturn.

2020 is Looking Up

With our finger firmly on the pulse, Galetti’s team of experts have compiled a list of the latest CRE trends!

Here’s what you can expect in 2020:

  1. 1.    The Rise of Proptech

More than a buzzword, proptech is changing the real estate landscape. In a recent article by Forbes.com, experts predict that 2020 will see an acceleration in the proptech start-up ecosystem. Johannesburg alone is home to more than 10 million m² worth of commercial real estate and has been identified as a receptive market for opportunists in the proptech sector.

Contrary to popular belief, proptech is largely driven by tech companies, tech start-ups and entrepreneurs rather than professionals in the property industry. “While companies like Zillow in the US have been innovating in this space for years, the general uptake has been slow” says John.

Proptech (such as tech mapping) brings much-needed digital transformation to CRE. “Data is key in making informed decisions. Clients are looking to technology for accurate information on the market and tech mapping is central to this process. Knowing where the market is and where the best deals can be found is critical”.

  1. 2.    Rentals are Stabilising

We saw this taking place towards the end of 2019, and it’s set to continue. “Rentals are now finding a base. We are experiencing more growth and interest in this area. With only so much commercial space available, technology and information should be at the forefront of informed decision making”.

  1. 3.    Opportunistic Buyers are Out There

There are some good deals on the market and planning ahead is key. “Companies with a good balance sheet are looking for opportunistic buys and adopting a five-year strategy will help in securing the right deal for you” explains John.

  1. 4.    Trusted Advisory is Key 

Clients are now looking to reputable, full-service providers for peace-of-mind. “Consider consultants with proven track records and an offering that includes both agency and tenant representation”.

  1. 5.    Co-Working and Mixed-Use Buildings Continue to Soar

With companies like WeWork paving the way, this trend is set to continue and in fact, soar! In a survey hosted on our Instagram page, 60% of participants said that they would opt for flexible working over a 5% salary increase.

Excited yet? Connect with our team at Galetti to find the perfect space for your business in 2020.

 

 

Galetti

Marketing Manager at Galetti

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