So what does the pandemic mean for our industry?
Of course it'll mean a very sharp shock at first. It will probably lead to new ways of working and perhaps even new building regulations. It'll undoubtedly lead to reductions in carbon emissions and a more relaxed attitude to flexible working.
However, the biggest question is what will emerge from this period of turmoil? We have to consider underlying macro trends as well as more local trends.
We at Macdonald & Company always keep a close eye on the market. We also play to future trends in order to give our clients a competitive edge. In times of uncertainty, collaboration and thought leadership helps us all to keep moving forward.
Stephen Glands, Director - Architecture & Design
So what have we found over the past few weeks and what sectors have the opportunity to be the most buoyant when the market begins to return to some kind of “normality”?
Before the pandemic, the move toward online retailing was already an elephant in the room. And now millions have no choice but to turn to shopping online for food and other essential goods. As the macro trends toward online shopping continues, Investors are circling troubled assets such as shopping centres and transform them into spaces people need and want to use.
What will the mix be? At present, the proposed mixes tend to be PRS housing with some mixed use and office space.
Will this change post Covid? We think the PRS housing will remain but the office elements will be looked at very carefully and will almost certainly be redesigned.
A sector that is effectively closed for business at the moment. Investors still seem bought in to the PRS model. Interest rates will almost certainly go up next year making it more difficult to save. Others may have increased debt due to a fall in income. Perhaps this will favour the rented sector? The mayor has asked for “temporary measures to grant maximum flexibility to the Greater London Authority to utilise funding provided by the ministry of housing via the affordable homes programme and land assembly, small sites and accelerated construction funds.”
Now more than ever, the sense of community is in the forefront; perhaps many will continue to seek this feeling of 'togetherness' with a social rental model?
This is the view held by some of our clients and it would seem to play in to the rented sector prediction.
The macro trend of utilising data, wherever possible, looks on track. This sector seems likely to continue to be robust and should bounce back with vigour once sites are reopened.
What will the new model be? Will there be new building regulations? What is the optimum workforce-number to justify having office space at any one time?
Less experienced and new staff will continue to benefit from physical interaction, bonding and face to face training. This will in turn require mid to senior staff to also be in the office to provide that support.
There will however be more provision for remote working, after all, pretty much everyone in a white collar job now has the capacity to work from home (organised swiftly overnight). That said, how many have suitable space for a home office set up?
Whichever way you put it, offices will continue to be of key importance to employers as will personal interaction continue to be essential for employees; but we will almost certainly see a re-balance of either the amount of space each company provides for it’s staff, or the uses of that office space for things that encourage health, well being and social interaction.
What a big and contentious question! Do we need to continue with historic levels of investment? If more people work from home, at least part of the time, do we need to continue to plan for the same capacities that we were expecting pre-pandemic? Will companies use more video conferencing to save cost and reduce environmental impact?
Healthcare & Laboratories
Surely a sector that will see more investment to build resilience in all countries? Whilst the work is yet to flow through the system, we expect these sectors will see considerable growth across the globe in the coming years.
This crisis is highlighting that we have a manufacturing sector to be proud of. It is also highlighting that we probably need more domestic capacity and resilience for essential products. We expect to see increased investment in manufacturing facilities.
Warehousing & Logistics
The people who work in these sectors have never been more appreciated than they are today. More than ever we need warehousing and distribution centres, and these spaces were already in high demand pre-pandemic. Big funds and investors have been piling money in to these sectors and there's no reason why should stop any time soon.
So what of education? It’s a sector that has seen a chronic shortage of investment in the UK since 2010. Education is the root of all good. A good education helps people to make good life decisions that will in turn relieve pressure on healthcare and social services whilst also benefiting the economy. Sadly we are not predicting a big uplift in work in this sector but for the one exception of R&D laboratory facilities in universities.
Has there ever been a higher demand?! We have been hiring IT managers for a number of our clients to help support them with mobile working arrangements. No doubt IT managers will see increased demand for their services in the coming years.
They always say that accountants should be OK come rain or shine. It’s a bit of a broad brush, not necessarily always true, but we have seen continued demands from our clients for property-related accountancy personnel.