By Richard Kendall
The COVID-19 pandemic has negatively impacted most, if not every industry over the past few months, creating a scenario of rising financial stress, retracting employment and diminishing market confidence for companies around the globe. The UK and European property industry hasn’t been immune from the pandemic’s downward pressure on the economy. Many commercial property owners and investors, and the service-based companies supporting these organisations, have found themselves in a wait-and-see mode before making decisions about projects and other business initiatives.
To that end, according to economic research consultancy Capital Economics’s March 2020 update, UK commercial property values are expected to fall about 10% this year. Real estate company CBRE’s Potential Impacts of COVID-19 on EMEA Real Estate report remarked that the hotel and retail sectors will be primarily impacted.
Moreover, a recent Investors Chronicle story pointed out that the COVID-19 crisis has put the UK housing market into stasis following the government’s advice to buyers and sellers to delay transactions so as to protect people from the virus. In fact Bloomberg and The Real Deal have noted property sales are on hold across Europe.
By no means is all lost for the real estate industry. First, it’s important to note there are marked differences between today’s economic crisis and the global financial crisis that forever changed the real estate industry some 12 years ago. What we’re experiencing now wasn’t initiated by a real estate event like the housing bubble in 2008. Rather, COVID-19 is a healthcare event that has largely put the global economy on hold until the Coronavirus “curve” can be flattened and significant progress can be made on a working vaccine. Economic fundamentals have recently been strong — for example, EU unemployment was at a record low of 6.5% in February 2020 according to Eurostat data the month before the widespread introduction of COVID-19 containment directives. Many industry experts believe that bodes well for a faster market recovery once COVID-19 is brought under control.
Secondly, market uncertainty always creates opportunities for smart, savvy and proactive companies to take a leadership stake in their markets, whether it’s communicating with their various stakeholders or marketing their brands in an authentic way to strategically position their companies for when the market fully returns.
Over the past several weeks, we’ve worked with our commercial property clients to navigate these unprecedented times with a wide range of communications strategies proving beneficial to their brands:
Crisis Planning + Response – When any crisis hits, the hope is that there’s been some planning in advance to anticipate the potentially negative impacts it will cause a company’s reputation and put in place some strategies that can offset brand risk among key audiences. Our property team has collaborated with companies of every size and type over the past several weeks to help them develop a suite of crisis-related materials, including:
Creative Earned Media – Engaging with the media during times of crisis carries a certain risk-reward element, and it’s not always beneficial to proactively pitch media on typical news stories, especially given their all-hands-on-deck approach to the COVID-19 pandemic. That said, real estate trades and business media have increasingly requested non-crisis-related articles about companies with unique stories to tell. There’s a growing sentiment among trade and financial outlets that readers want more coverage of business-as-usual transactions, like this story on a 12 property-strong portfolio acquisition deal in Germany or this article about Belgium-based office developer Immobel which hired JLL and CBRE for its new office tower in Poland.
Strategic Thought Leadership – Crisis situations can often present golden opportunities for companies and their executive leadership to take an authoritative position in their communities on a wide range of issues – helping to build stronger brand loyalty and trust among their key publics. Architect and engineers from BDP achieved coverage in BBC Online for its role helping to convert London’s ExCel exhibition centre into Nightingale Hospital. Its Principal Engineer James Hepburn described how the construction required a unique approach and design to achieve project completion for the scale and in the timeframe required.
One way in which Allison+Partners helps its property clients in this capacity is through surveys and other data collection initiatives. Currently, one international firm has instituted a multi-phased “Work from Home Survey” to gather insights from employees about how their workday has changed during the coronavirus pandemic – information it will share periodically with key target media.
Stakeholder + Community Engagement – The COVID-19 pandemic, and the resulting economic retraction, has created a host of problems in the commercial tenant market, with retailers, small businesses, nonprofits and many other users finding it difficult to pay their monthly rents. Many owners have responded positively by establishing rent-deferral programs to ease the pain. This includes Landsec, which is agreeing rent deferrals with many retail and leisure occupiers in the UK, and Hammerson, which has deferred April rental payment for all brands in the Hammerson France flagship portfolio.
If you lead a property company in Europe and are looking for help building a stronger communications message during these uncertain times, please contact the Allison+Partners London office at firstname.lastname@example.org or sign up for our weekly COVID-19 updates.