Many companies in the CEE region might consider a hybrid mix of remote and office-based work along with software for management of distributed teams, project management, team management and even skills management in the business.
"We expect that a fair amount of market activity in 2020 will come from lease renegotiations and renewals as opposed to new and pre-lease transactions. We might record more sub-leases being offered if companies need to downsize. Tenant covenants will receive additional scrutiny by landlords, banks and investors in order to limit risk to a sustainable income." That is the gist of the Colliers global survey about the post-CIVID-19 world.
The Colliers ‘Rebalance your Workplace Planner’ enables organisations to be agile and proactive not reactive to an unknown set of economic and health variables.
Key take aways of the report include:
- Some business and property sectors will be affected more than others and more time is needed to understand what the future will look like. Change is always coming, but the type of crisis, its rate of change and its truly global nature create a truly mind-blowing set of variables, making it very difficult to predict meaningful outcomes.
- In the office sector, we understand very well the pressure that everyone is under and how tempting it is to make quick or perhaps emotional decisions. That said, Landlords and Tenants are largely having open negotiations on how to move forward in these difficult times.
- Rental deferrals and additional incentives have been most common across the region, as opposed to rent reductions. In return for these concessions, leasing contracts are typically being prolonged by an appropriate period.
- Due to good levels of market activity in recent years across the region and assuming the more common 5-year lease terms, we expect a fair amount of market activity in 2020 will come from lease renegotiations and renewals as opposed to new and pre-lease transactions where there may be less pressure to make a decision until there is more clarity. There is also a good chance that we will record more sub-leases being offered if companies need to downsize.
- Tenant covenants will receive additional scrutiny by landlords, banks and investors in order to limit risk to a sustainable income. Similar to the leasing markets, there has also been a slowdown in investment activity, again partly due to a lack of clarity in where the markets will settle, but also due the fact that investors have been unable to travel to view opportunities. As markets re-open, we expect transactions to pick-up in the second half of the year.
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