Adapting is the name of the game now COVID-19 has pushed industries the world over online. Commercial property companies have been quick to adjust, dispelling doubters by seamlessly shifting to selling and communicating via virtual means.
And in an era where we can even find our significant other online why not property?
“As we say to our clients, you can choose a partner online so it’s easy to pick a property online,” said Nicholas Heaton, CBRE’s senior director of metropolitan investments. “The key is to have an agent with the online capabilities and processes to achieve an outcome.”
Rapid change is now our only constant: midnight March 25 signalled the start of new rules banning open for inspections and public auctions in the commercial and residential property industries. As of last night (March 30), stricter social distancing rules state open for inspections (though mainly affecting residential property) are now limited to one agent and one purchaser while National Cabinet also announced a moratorium on evictions over the next six months for commercial and residential tenancies in financial distress who are unable to meet their commitments due to the impact of coronavirus.
Virtual gets the vote
Since the March 25 ruling, numerous properties have transacted online while the use of applications such as Zoom, Skype and WeChat for both client and internal communications between staff have soared. For those properties shifted from auctions to EOI all inspections and dealings taking place online.
Listings continue to flow, especially retail with petrol stations and strongly tenanted properties in good locations proving popular. Rapid changes hitting across the board include the rising popularity of small speciality food retailers in complexes anchored by supermarkets, resulting in Ray White releasing a research report last week around the increased enquiry levels for such assets.
CBRE has taken the virtual reins of online dealings and seeing positive results. Nicholas Heaton, CBRE’s senior director of metropolitan investments, said the company adjusted to the new COVID-19 conditions immediately, implementing a virtual sales process which has been highly successful in the past week.
“This has allowed us to complete seven transactions in the past 14 day, including the sale of a significant office investment at 280-286 Pacific Highway, Lindfield for a record price,” Mr Heaton said.
“The logistics have changed, but the results clearly highlight vendors and buyers can transact safely and successfully in the current environment.
“While there is currently still the ability to do one on one inspections if buyers prefer, using appropriate social distancing, we’re preparing video inspections on all our campaigns. Zoom calls then allow buyers to negotiate deals.
“We’re also still conducting auctions however these are now all happening online with phone bidding.
Like the majority of companies, CBRE is now primarily using Zoom for both internal and client calls, Mr Heaton said, as well as internal and client focused webinars. This includes “Flash Calls” involving CBRE’s research team which keep clients informed, ensuring they are up to speed across the latest market updates as their frequency ramps up.
“Internally we’re focused on ensuring all teams do regular Zoom calls with their cameras on to ensure people stay connected,” Mr Heaton said. “As CBRE’s office-based workforce is now all working remotely everyone is adjusting to a whole new way of working.”
Burgess Rawson, market leader in investment grade assets such as supermarkets, service stations, childcare centres and fast food franchises, is equipped with the capability to move to online auctions when necessary, but is catering to its database by offering telephone bidding, and moving auctions to EOI and deadline private treaty.
Buyers are adjusting quickly, said Burgess Rawson sales agent Tom Doran.
“We are marketing a KFC investment in Taree NSW and the buyers are now requesting more photos along with floor plans to give them a better feel for the opportunity,” Mr Doran said.
Marketing director Stephen Lovison said the agency had close connections to its unique set of buyers and investors. “It’s important to note that whilst we have had to quickly engage other sale methods like online auctions, perhaps bidding via app - we know our buyer pool and where possible we are sticking to procedures that they are already familiar with,” he said.
“Our database is unique so the competition we create in the market may not be face to face but it is replicated online.”
Internally, the firm has been cloud-based for years and uses Microsoft Teams.
“With agents on the road or working from interstate offices, we are familiar with the remote workplace,” Mr Lovison said. “It goes without saying though that adjusting to semi-permanent WFH will present its own challenges. Everyone’s missing the office banter – you can’t quickly check the opinion of the person next to you about whether to put one photograph in a brochure or another. So we’re making more phone calls between each other, and check in as a team each morning, so we know we’ve got each other’s backs.”
At other major company’s JLL has enhanced online offerings including virtual asset tours while Knight Frank is using Skype and WeChat among others to keep clients informed and for dealing internally.
On the agency side, Ray White Commercial is forging ahead with online private auctions, the agency’s multi-million-dollar investment in technology paying off. The company’s commercial agents including Ray White’s Commercial Sydney Office Leasing and Strata Sales Principal, Anthony Harris have already ramped up virtual property inspection abilities in a way that signals the way of the future has arrived a little sooner than we expected.
Hope on the horizon
With lease negotiations also entirely online, Mr Harris said the changes that struck the entire commercial property industry in the last two weeks alone are largely temporary.
“The majority of office leasing transactions at heads of agreement and deposit stage in February have not proceeded to execute leases issued in March 2020 and from our discussions with other major leasing agencies and landlords its apparent this is across the board,” Mr Harris said.
“However these deals have been put on hold as opposed to totally abandoned, which is indicative of the uncertainty in the market. There is a sense that once the uncertainty is removed there will be an initial surge of transactions that have been held back and fence sitting, waiting to see the other side of the ‘bridge’.”
The longer-term impact on office rents and incentives was too early to call, Mr Harris said. “Clearly many industries will not survive the economic down-turn, but we are seeing early signs that other sectors will survive - and some may thrive.
“Professional service businesses such as accounting, legal, banking, technology and medical related industries are optimistic and waiting for good leasing deals to surface and secure.”