Global property firm JLL has published an outlook of the global property industry during and post-COVID-19 crisis. The report highlights the impact of the coronavirus on property markets globally.

According to the report, the living sectors have defensive investment characteristics, benefitting from stable cash flows and resilient demand fundamentally supported by the unaffordability of homeownership, urbanization and increased interest in more flexible-living solutions.

However, the firm says that operators in the living sectors namely residential, student housing and co-living to senior/healthcare will need to put in place mitigation protocols to minimize contagion. The outlook for the various segments is as follows:


Residential property is the largest asset class globally and multifamily units will remain resilient to the effects of the COVID-19 outbreak with its more stable, longer-term income profile and defensive investment characteristics.

However, short-term demand uncertainty is expected in locations that rely on demand from international buyers. With respect to technology, it is expected that new online transaction platforms will be accelerated in 2020 to mitigate physical contact.

Student Housing

The widespread closure of schools and higher education facilities, coupled with the increased adoption of online education modules presents a short-term risk to investors in the segment. Furthermore, lockdowns leading to travel restrictions will have a direct impact on occupancy, new applications and income as the crisis drags on.

Senior Housing/Healthcare

For regions with significant investments in senior living facilities, needs-based care homes will be more resilient to COVID-19 demand effects, but this will be offset by additional operating costs related to much higher protection protocols required for occupants.  In the short term, investment activity will be constrained as asset-level due diligence is restricted.

Office Markets

The adoption of the work from home advisory from many governments and health experts is likely to reduce demand for office space. Landlords with short-term leases are particularly vulnerable to the expected reduction in office utilization rates as remote working increases.

As a result landlords are more likely to give in to more concessions on new lease packages, if any. In fact, the report encourages landlords to acquiesce on small points in lease negotiations to ensure deals are executed and long-term NOI is preserved.

The exposure for co-working office markets is much dire if clients decide to terminate short-term contracts altogether. Hybrid operators with more secure medium-term income will be less exposed.

“We are in the middle of the largest test of home-working in history and corporates are adopting, refining and testing policies, processes and infrastructure to make it work,” says the report. “We expect quarantine protocols to encourage work-from-home initiatives and for these practices to be adopted in new geographies as contagion spreads.”

Notwithstanding the adoption of remote working, in the long-term, however, demand for office space is expected to remain unchanged.

Retail Markets

The impact of the headwinds from the COVID-19 crisis on global retail will be significant.

“Global retailers must prepare to navigate a period of elevated risks to cash flow and increased operational costs arising from a slump in consumer demand and disruption to supply chains,” it says.

Constraints in international travel will no doubt affect global gateway cities, luxury markets, and super-prime retail destinations. Retailers hit hardest may seek temporary rent reliefs from landlords while retailers with corresponding online infrastructure will experience the least impact from decreased foot traffic.

On supply and demand of retail space, the report notes that “If liquidity and capital constraints arise, new store openings will slow and refurbishments will be delayed.”

In the long-term, retailers may opt to adjust supply chains to ensure continuity and mitigate the risk of future shocks. Initiatives as production and housing of more stock locally may be adopted. Such a move may create a positive flow into industrial and logistics properties.

Industrial and Logistics Markets

COVID- 19 has had one of the biggest impacts on global supply chains, causing a massive effect on the industrial and logistics sectors. Reduced activity has resulted in a lot of idle space and underutilized resources in major locations.

The effect according to JLL is that warehouse capacity utilization will fall globally and firms specializing in fulfilling short-term excess space demand will probably see a drop in demand.

In the long term “the move towards online shopping, especially for groceries, could become a more permanent part of the retail landscape which would in turn boost demand for logistics space,” says the report.

As a catalyst for societal and real estate change, the question remains on whether COVID- 19 will force the enhanced integration of technology across all aspects of life and business.

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