Restarting the economy relies on solving two major challenges: providing safe, socially distant mobility options that enable people back into towns and cities, and creating environments in which they will feel safe to spend their time. Each of these present opportunities for innovative businesses. Many firms have already risen to the occasion, as several examples from across the world highlight. The chapter on mobility explores the challenge of getting people moving again. In this chapter we look at how COVID-19 and lockdown has impacted the built environment sector – from real estate and asset management, to housing and high streets – and how innovation will enable reinvention and revival.
In this article we will focus on three main areas:
- Right now – the current situation and the emergency response within decision-making and institutions during lockdown.
- What next? – the transitional restart for decision-making and institutions in the post-lockdown, pre-vaccine period.
- Beyond recovery – a look further into the future ahead for this sector.
Horizon 1 – Right Now
Immediate market impacts and shifts from the outbreak – and the possibilities they signal
The onset of lockdown in towns and cities across the world led to empty shops and offices, and – in many cases – crowded homes.
Commercial landlords secured just 18.2% of rents owed for the quarter ending 24 June – a 28% decline over the three-month period. By comparison, 84% of commercial rent had been paid 60 days after the deadline for the December 2019 quarter. Retail properties were the worst-performing group, collecting just 13.8% of rent owed. In the week we are publishing this report, the retail centre giant Intu filed for administration, in part as a result of the collapse in rental income.
High Streets and shopping centres have been hit especially hard by lockdown, with non-essential retail forced to close for months further accelerating the exodus to online retail. Profits at Primark, a clothing store with no online presence, fell from £650 million a month to zero during lockdown. Even with more shops now allowed to reopen, the need for social distancing has discouraged any swift return to normal.