• Tuesday, May 28, 2024
businessday logo

BusinessDay

Global property market in limbo as coronavirus fears spread

events centre

Besides oil, property is one other commodity market that has been hard hit by the coronavirus pandemic, leaving the market in limbo. Both buyers and sellers worry about risk of infection which, in the UK market, for instance, has led to drying up of viewings.

The virus has affected all segments of real estate in Europe and America. In London, according to reports, income loss runs into billions of pounds. The rental market here is the worst hit as transactions have ‘died’ completely.

In Nigeria, the story is not different. The country is currently gripped by fear of the virus, prompting the government to take far-reaching policy decisions including the banning of public and social gatherings.
Again, the government has placed travel ban on some countries known to have been badly affected by the coronavirus. There has been an immediate impact of the ban on public gathering on the market.

Social events including corporate conferences already scheduled for this month and the next have been cancelled or rescheduled to later dates, leading to heavy loss of revenues to operators of event centres.

“The coronavirus is already affecting our operations; all the conferences slated for our centre (Landmark Event Centre) have been cancelled and that means loss of revenue for us. We are looking at about N8 million loss in the next one month,” Paul Onwuanibe, CEO, Landmark Lagos, confirmed to BusinessDay.

According to him, the market may be losing over N800 million revenue monthly, assuming there are 100 event centres in Nigeria. This, he noted, is a significant revenue loss for the economy.

The Landmark Lagos, also known as Landmark Village, is a one-stop shop for living, working and leisure. Its leisure facilities are world class with the Landmark Event Centre being a leading destination for corporate events in Lagos.

Onwuanibe said that the coronavirus was affecting everything real estate including hospitality, where occupancy rate has dropped, and retail, where footfall has also dropped at malls as people fear contact with other people. Demand for both residential and commercial property has come down too.

Related News

Gbenga Olaniyan, CEO of Estate Links, agrees, pointing out that though the impact of the virus was not yet on property prices, it was already deep on transactions, especially on non-essential real estate.

He projected that if the virus did not go away in the next one month, there was every possibility of it affecting property price and that would mean revenue loss for investors and estate agents alike.

“Clients no longer go for inspection because they fear physical contact with other people,” he said, citing instance of a client who wanted to take a space in Trinity Towers, an iconic office building in Lagos, but had to put it off till further notice, because he did not want to go for inspection now.

Like Nigeria where the projected 2.16 percent growth for 2020 is already under serious threat, a post-election bounce in the UK property market is rapidly fading as coronavirus precautions hit house viewings and buyers and sellers reconsider their plans.

“Everybody’s diaries are now pretty empty for viewings and that became apparent in the course of last week. I don’t think there’s anybody in our business expecting to be opening a lot of doors. Some people don’t even want you through the door,” Roarie Scarisbrick, a partner at buying agency, Property Vision, said.

However, it is not all tales of woe everywhere. In the US, for instance, something positive is coming from government quarters and that is aimed to stimulate the market at a time when the rest of the world is catching cold.

For the second time in just two weeks, the Federal Reserve has recorded emergency rate cut, bringing its target interest rate to near-zero percent. According to Olaniyan, this action is designed to stimulate the economy by making it cheaper for people to borrow money for a mortgage, among other things.

CHUKA UROKO