Approaching the annual marker of when a novel virus upended life as we knew it, I am drawn to introspection. As I continue to whittle away in my hermitage, I am reminded that it’s been more than a year since I have put on a tie, set foot in the Square Mile or checked into a hotel. I suspect your experience bears some resemblance. Sure, you may have popped into the office when mobility restrictions were looser or maybe you were even lucky enough to get away for some holiday respite, but surely the experiences were curious affairs. The past year has been like no other in living memory. So, I’d like to commemorate by sharing some lockdown reflections.
The pandemic has been the great accelerator of pre-existing structural shifts across all property types. For retail, it instigated ten years of change in the span of just ten months, helping fast-track the rebasing of unsustainable rents while providing evidence to adjust values. And whilst I acknowledge the challenges still facing the sector at large, I am constructively minded about the role retail plays in people’s lives as well as property portfolios. The pandemic has also shaped consumer behaviour, with a clear shift towards digital avenues but also homegrown alternatives. The choice of Amazon Fresh to open their first European outlet in suburban West London rather than in more central confines is testament to this. The return to local is a good thing and reinforces my view that convenience is as relevant as ever.
The initial disruption to global trade at the onset of the pandemic reminded us of the fragility of supply chains. I found it effectively impossible to source a set of kettle bells, which is remarkable really that a blob of iron can’t be forged and flogged closer to home. The inability to secure simple items became a frustratingly common experience and for those in Britain only made worse by Brexit- related trade disruption. As a result, firms accustomed to operating with lean inventories, supported by just-in-time delivery are being forced to adapt to a just-in-case model. Along with the re-shoring of production and the pronounced evolution of ecommerce, this provides a fillip to industrial and logistics demand. Still waiting on the delivery of my kettle bells, I have found other impedimenta to heave.
The continued necessity for remote working has triggered a considerable amount of prophesying about the role of the office. Provocative futurists argue for its demise while certain traditionalists have called working from home an aberration. The truth likely rests somewhere in the middle. As a result of changing workplace expectations, we see a decline in European office demand of around 10%. So, this does not suggest a mothballing of monolithic business districts, though inevitably it will transmit to rents and influence sentiment. The burden of proof is understandably higher to invest in the sector now than it was when I last left the office.
And on that note as well as echoing the views of so many, I dearly hope we can put this experience behind us. I’m ready to put on a tie and venture back into the City!