Raoul Salter, a Partner at Gross Waddell, has over 25 years of experience in the property industry. Raoul’s early career included being responsible for high net worth clients at Knight Frank and acting as the Commercial Manager for Linfox, being responsible for the company’s management, leasing, disposal and acquisitions.

Now at Gross Waddell, Raoul is active in Sales, Leasing and Corporate Services. He also is Gross Waddell’s Principal auctioneer.

Raoul’s experience across the commercial sector provides interesting insight into the evolution of commercial property through the recession and COVID-19.

Property activity is key to our economic wellbeing. So, what can we expect of this industry as we adjust to living with COVID?

We can reflect on the effects of past challenges; the recession of the '90s, the 'tech wreck' of 2000, the GFC and others. Each time, the property market has found a way to navigate the negative and come out the other side, stronger and more resilient.

This time will be just as testing.

Residential

If we look at it objectively, it is clear that from a residential perspective, we will eventually reach a position where there is an undersupply in the market and savvy developers will continue to secure opportunities for the potential pipeline.

Offices

Likewise, due to the current environment, commercial space may well undergo design changes that will lead to more activity in this sector.

The demand for office space in the future may be reliant on technology and innovation that facilitates social distancing solutions and healthy building strategies.

Increased planning of common areas, access, timing and travel will be essential. Air filtration systems that can keep workers safe from COVID-19 and other illnesses into the future will be an integral part of these changes. Vertical transportation is a more complex feature to manage.

What businesses and tenants expect from their office accommodation is changing and these needs will most likely be met in new developments, and where possible, integrated into existing buildings.

Retail

Retail is also clearly changing and, as has been the case over the past decade, will continue to reinvent itself with the focus, perhaps, on more service-based retail, as a result.

The retail market has been one of the heaviest hit sectors. Widespread lockdowns have meant people have increasingly been adapting to shopping online. This may result in retail properties being redeveloped or repurposed, perhaps to offices, coworking spaces or ‘dark stores’. On the other hand, it may see an increased interest in customers to shop in open air traditional retail strips.

Industrial

The industrial landscape is also undergoing changes with increased automation and logistics requiring design alterations and larger sites.

Specifically, Australians are expecting industrial space to increase with a recent report released by UBS predicting warehouse space needs across the country to increase by 7.5 per cent during the next two years; with the potential incremental demand for industrial space growing to one million sqm.

High demand for consumer staples and growth in E-commerce has also driven strong leasing performance in the industrial sector.

For example, in June, Amazon signed a 20-year lease to open the country’s first robotic fulfilment centre in Western Sydney. The fully automated facility will span over 200,000sqm, and will hold up to 11 million items distributed by 2000 robots.

The message here is that the property industry, whilst being key to our economic health, is also robust and adaptive.

Investment

Of all of the asset classes, bricks and mortar remains one of the most popular. Perhaps the fact that it is tangible, you can see it, touch it, feel it and know that it will still be there tomorrow, next week and next year makes it desirable to many.

Property investment is also dynamic with the ‘moving parts’ requiring monitoring and attention from time to time. As mentioned above, the dynamics of each of the property categories, commercial, retail and industrial, continue to evolve and undergo change. Perhaps more so now than ever.

Initially, the existence of COVID 19 led many to believe that we were heading into a state of Armageddon. Like the Phoenix, the property industry will rise from the ashes and continue to be a major contributor to our economic recovery.