Offices should expect "changes in occupancy and use of space"

Offices should expect "changes in occupancy and use of space"

Sharing his perspective on the crisis that hit the sector and the world with VI, in the segment "Conversas Diárias – Especial Covid-19" (Daily Talks – Special Covid-19), Jorge Marrão stated that, within this new reality, «service companies will soon find that through remote work, they will manage a different use of space without changing productivity. It is something we need to pay attention to». If this trend is confirmed, «we will have much wider office spaces. The existing offer, which was scarce, may be become more adequate and allow for companies to relocate their offices».

On the other hand, co-working may also suffer some changes: «once spaces become more abundant, the occupancy profile changes. It is likely that that business model will suffer with it. Companies may also start thinking about relocating», said Jorge Marrão.

In terms of the logistic and industrial segments, he noted that «short term leases might not make sense anymore. And the chains will want to have their supply spaces closer, and there may be an attempt to relocate some of those spaces. We do not know how much the companies’ stocking policy may change».

He further alerted that the real estate sector «must be aware of the fact that the buildings’ value is highly dependent on the country’s interest rates and risk. The way Europe sends aid and monetary and fiscal incentives to each country can greatly alter the interest rates. We may go back to being a country with good investment opportunities if prices drop».

Recovery «will be relatively slow»

According to the experts consulted by Deloitte, «the economy’s recovery will be relatively slow».

If, until now, «countries and cities competed with high profile events, large investments and notoriety, in the near future, anything that involves great crowds will carry additional risk».

Within a scenario of «relatively medium optimism», experts believe there will be a double-digit drop in terms of GDP in 2020. But he warned that «it is hard to make projections right now. All depends on what the Governments will be able to do to, on the one hand, stop confinement and, on the other hand, inject liquidity for companies and families, then we will be able to assess the situation. The measures that were taken aren’t fully operational yet, and we need to be patient».

Iberian Property logoIberinmo logo
Iberian Property is the best platform for investment in Spain & Portugal. Created for those who seek reliable information about players and deals happening in Iberia. Through updated database, reports, market indicators and daily news, we report “Who’s Who” in Iberian Real Estate!. Iberian Property is also proud to organize the most important international real estate investors’ meeting in Iberia - Portugal Real Estate Summit!