ONE of the outcomes of T&T’s current economic position is that there is likely to be increasing pressure on landlords of commercial properties to reduce their lease rental rates, says Mark Edghill, president of the Association of Real Estate Agents of Trinidad and Tobago (AREA).
Speaking at the Building Alliances for Recovery series webinar last week Friday, Edghill provided his perspective on the real estate industry and an overview prior to the Covid-19 pandemic:
• Increasing commercial inventory due to economic conditions
• Businesses downsizing to smaller spaces
• Low interest rates and 100 per cent financing was attracting middle and lower-income buyers
• Job security was a growing concern for prospective buyers
• Lay-offs seen in large operations, public and private
• Government revenues declining and reduced spending
• Reduced consumer income.
He said the pandemic, and its associated closure of many businesses for three months, exacerbated several of the issues the real estate market faced before the lockdowns.
The economic impact of the collapse of prices in the oil and gas sector has led to reduced Government revenue, which will mean a cutback in spending by the State in the near future.
Lack of clarity about Government spending, plus the dislocation caused by the lockdown, is causing businesses to downsize and close their doors.
This is leading to further increases in commercial real estate inventory and pressure on landlords to reduce commercial rents.
Throughout the country, Edghill said, businesses are having to reassess their current position with respect to new operating procedures and protocols regarding staff and the access and contact with the public.
This is allied to the fact that true effects of the pandemic are not yet fully measurable.
On the bright side, the real estate agent said there are indications of interest in acquiring properties by people in the middle and lower income groups.
Edghill said what needs to be done in possible design expectations of office space is place more attention on special design and internal configurations based on use.
“What needs to be considered in the new normal is ventilation of individual workspaces, along with wider corridors, reduced capacity per square foot for common areas, more drive-through access for contactless transactions (banks, pharmacies, food service, offices); touchless features (automatic doors, washroom fixtures and fittings, light switches, voice-controlled elevators, etc) and washroom access without doors.
According to Edghill, the pandemic has caused a greater shift towards virtual offices for employees and business transactions creating less demand for commercial space, which the industry is now forced to grapple with.
Also speaking at the webinar was president of the Trinidad & Tobago Institute of Architects (TTIA) Ronald Ammon who said the retail industry is experiencing many challenges as shopping facilities are forced to restrict numbers due to the virus.
“We will have to wait and see how malls will adapt to the new social distancing requirements, while they still pay exorbitant rents to accommodate a premium shopping experience. This can add an additional challenge, as some customers can use online shopping to reduce their exposure to the virus.”
Ammon further noted that architects can assist with redesigning and upgrading the bus terminals along with the Piarco International Airport, to adapt to the new normal going forward.
The head of TTIA said the real estate industry is one of the many sectors that have taken a hit in the Covid-19 pandemic and coming up with innovative solutions must be paramount, in order to survive, post Covid.
Ammon said for far too long lack of proper legislation, poor planning and design considerations have been ignored by governments.
He said while this time can be depressing both financially and mentally for some, now is the time to develop the ideas for an improved built environment, which can help promote regional economic recovery.
“If Covid-19 persists, it will question the open plan layouts that architects and designers have been creating for the past few decades. Some local companies have already adapted from working at home or on a shift business and if the economic impact of the pandemic increases, would working from home be more widely adopted? What would become of commercial real estate, as spaces would become less attractive economically.”
He added that that the onus is now for architects to think ahead and propose design strategies in the new normal.
And, president of the Trinidad and Tobago Society of Planners, Victoria Hobday said a flexible and proactive response in these uncertain times is needed.
The TTSP is a body comprising urban and regional planners who work closely with architects in planning to improve business, commercial and residential space.
She outlined that planners must not stay stuck in the rut of policies and standards that are out of date and irrelevant to the challenges of covid, climate change and more.
“In the short term, the planning system needs to quickly clear the application backlog that got worse during the stay-at-home order. Moving forward, planners must keep abreast of the rapidly evolving situation, so that we can respond appropriately and quickly.”
Hobday noted that planners need to start thinking outside the box, as to how empty businesses spaces could be converted for other productive and appropriate uses, instead of applying policies that are no longer relevant.
The webinar was an initiative undertaken by the Trinidad and Tobago Coalition of Service Industries (TTCSI) and exporTT, which is geared at creating collaboration with the various service sectors.