Real estate developers, particularly commercial office space suppliers, are becoming increasingly creative and innovative, adjusting and rethinking their product offering to respond to the new normal and the future of work which coronavirus has foisted on the world.
The lockdown order given by governments at federal and state levels as part of measures to contain further spread of the rampaging virus has revealed a lot of things that are possible, especially with regard to working at home and virtual conferences that have now become the new normal.
The implication of this is that the 2,000-5,000 square metres office space, sometimes in two to three floors, may no longer be necessary, just like same size conference and event centres with all their fantastic designs and facilities.
“We are already thinking in line with the new normal and preparing to respond to the future of work. Apart from observing all the protocols – washing hands with soap, applying sanitisers, and maintaining social distancing – we are already taking businesses online,” Paul Onwuanibe, CEO, Landmark Group, told BusinessDay in a telephone interview.
Onwuanibe confirmed that developers are already adjusting to the new normal and rethinking their product offering for the future of work. He said the company has created a digital office and very soon would come up with a virtual room for conferences.
Landmark Group is the developer of the expansive Landmark Village in Lagos which is mixed-use development and one-stop destination for living, working and leisure. Some of these facilities may be affected by the new approach and attitude to work.
On their part, Alpha Mead Development Company (AMDC), the real estate investment subsidiary of Alpha Mead Group, says it is going into land banking which it will operate like deposit banks.
“Subscribers to this scheme can deposit any amount as low as 10 percent of the property value and start earning income from day one of making such deposit on the land. This money which will be deposited with a trustee can be accessed at maturity stage,” Damola Akindolire, managing director of the company, told BusinessDay on phone.
Akindolire said they are also offering what he called fractional ownership of apartments, in which case three people can come together and pool money to buy a three-bedroom apartment and start earning shared income from the rent or lease.
This, he said, has already started in the company’s Lekki Pearl Estate, a moderate middle-income housing estate in the Lekki axis, Lagos.
Over all, experts say there will be a significant impact not only on the commercial spaces, but also event centres, restaurants, hotels, exhibition halls, student hostels, etc will be impacted by the new normal, especially post-COVID-19.
The impact of companies deciding and encouraging their employees to work from home will be significant, according to MKO Balogun, CEO, Global PFI, who estimated that existing office space users may give up more than 40 percent of occupied spaces.
“Rent renewal will be impacted, new developments will not be able to command the kind of patronage or rent required, leading ultimately to a reduction in capacity and investment in commercial real estate,” Balogun said.
Kunle Awobodu, president, Nigerian Institute of Building (NIOB), said landlords would be at the receiving end of these developments. In a telephone chat with BusinessDay, Awobodu argued that if tenants decide to contract their spaces, landlords would suffer losses in terms of expected rents.
“There could be reduction in rent because landlords would like to use that to attract new tenants to their property,” he said, adding that the reduction in meetings and conferences is already affecting event centres, hotels and tourist centres.
