Commercial Real Estate Feels the Pressure
April 30, 2020

The approved proposal by government will see 40% of South Africa’s workforce working both remotely and on-site from 01 May as part of a risk-adjusted strategy.

While the government has been commended for their exemplary work during this time of crisis, many businesses and industries are up in arms. The timeline for phasing is currently unknown and the effects of this pandemic at both a company and an economic level will be felt for years to come.

More Support is Needed as Uncertainty Looms

John Jack, CEO for Galetti Commercial Real Estate says the demand and urgency required by their sector impacts most of the country’s industries. “Commercial real estate is under major pressure and is only set to re-commence at level 3. Time is against us. Our industry has been severely impacted by the Covid-19 crisis and with no form of recourse in sight, the industry has taken a major financial hit due to non-payment by tenants”.

“We would have liked to see negotiations taking place between government and the likes of industry bodies, SAPOA and NPPC to assist in a trade-off agreement between reduced rentals and eviction proceedings,” he explains.

With the short-term future unknown, Jack and the industry at large have urged government to reinstate real estate services to avoid further losses. “Our services have a direct impact on conveyancers, banks, transfer duties, and business advisory”.

A Proposed Way Forward

Low impact and a low chance of spread are two of the criteria set out by government when determining the services and industries that can operate at level 4 of lockdown.

“Companies operating in the corporate real estate advisory sector are seeing a significant increase in workload. We are spending most of our time advising tenants on how to restructure their agreements and how to engage their landlords. While a lot of our work can be done from home, site visits remain critical to our industry”.

Jack proposes that site inspections be carried out independently while the remainder of work functions be conducted from home. “The number of people impacted versus the economic value is very low therefore the operational densities are not even a consideration”.

Jack urges government to work with the sector. “Recouping our losses is vital to the stability of our industry. As a key player, we urge government and businesses to work together to ensure our sustainability and productivity in the long-term.”

 

Fun facts: Missing the Office?

In a recent in-house survey conducted by Galetti Corporate Real Estate, 86% of respondents said that they are struggling with work-life balance during the lockdown and 79% of respondents said that they are looking forward to going back to their place of work.

 

Galetti

Marketing Manager at Galetti

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