The current COVID-19 situation has impacted the global economy as well as real estate markets in individual countries. Property developers in places such as the Philippines and Thailand must be willing to act quickly in order to survive the next few months.
“We’re experiencing a Black Swan event on a global scale that has slowed down the world economy and, with it, the property market. Liquidity, flexibility, and business continuity are of utmost importance for companies to continue running,” Rick Santos, Chairman and CEO of Santos Knight Frank stated.
Santos Knight Frank found that there were four strategies developers could adopt at the moment to help manage the current situation.
4 strategies to help developers cope with the current crisis
1) Focus on liquidity
Real estate requires a lot of capital and depending on how long the current situation carries on, liquidity could become a problem. Santos Knight Frank believes some developers should consider selling non-core assets, seeking overseas funding or acquiring loans to manage their liquidity.
2) Work with occupiers and tenants
Developers must be willing to work with occupiers and tenants at the moment to ensure they also have the ability to overcome their challenges. This includes creating solutions in terms pf payment structures that ensures all parties feel secure.
According to Santos Knight Frank, developers also need to consider health and wellbeing. In the short term, this means focusing on property management to protect tenants. In the long term, companies should think about wellness-oriented developments as more people and businesses become aware of health and wellness and the role real estate plays in this.
3) Invest in online platforms
Santos Knight Frank highlighted the need for property developers to invest in online platforms to boost sales and streamline the process for clients. For example, investing in virtual tours can make it easier for clients to view properties regardless of where they’re physically based.
Maintaining marketing budgets for online platforms, such as Dot Property, is also important as there are still buyers out there. However, competition for these buyers is significant meaning online visibility is vital.
4) Use empty spaces more effectively
The final strategy recommended by Santos Knight Frank is for developers to convert empty or non-revenue earning real estate assets into spaces that are in demand. These include facilities like pop-up healthcare centers, employee housing and warehouses for last-mile logistics that businesses are now searching for.