No-one knows exactly how the coronavirus will impact the economy but what is known for certain is that it will be significant. Property Council of Australia chief executive Ken Morrison says the property industry will not be excused from the fallout.
A growing number of people are pointing to a potentially radical change in the way we work thanks to coronavirus. Hot desking will be out, co-working less appealing, and more people working from home.
By the time staff skill up with home technology – appropriate devices, video conferencing and bigger bandwidth – a lot of people will get used the idea and choose not to come back. Maybe up to 20 per cent in some views.
That’s not a scenario you’re going to get from the big property agencies that manage big portfolios of offices and other facilities.
They’ve gone into a lockdown of their own and implementing critical scenario/crisis management planning had been implemented, which means they’re trying to not say too much.
But there’s enough information seeping out anyway.
We know that Atlassian, Macquarie Group and EY are among the high profile companies that have told their staff to work from home. The 15,700 staff members from Macquarie have been told they could be at home until mid-year.
AMP Capital’s head of sustainability Chris Nunn said the company has been testing its business continuity and working from home in 50:50 shifts since last Thursday, and 100 per cent from Friday.
It would be reverting back to 50:50 from Wednesday this week with some variations. “Asset teams on the ground have been divided into teams that will not be in contact with each other.”
By Tuesday afternoon, a steady stream of companies, big and small, added similar announcements.
Property Council of Australia chief executive officer Ken Morrison told The Fifth Estate that early in the day, shortly after sending an alert to members, that the situation was moving fast. In his own organisation, it was now work from home with all events and educational courses suspended until 29 May. Meetings would be virtual environment.
“We’re in a rapid state of change, people are trying to get their heads around what near future looks like and its implications,” he said.
“The impact so far has been about the exposure to China. From now it will be about the restrictions put in place to control the movement of the virus through the community.”
Most impacted in the short term will clearly be labour mobility. “You can’t build an apartment building from your lounge room,” Mr Morrison said.
What’s unknown is when restrictions will be put in place by the government, in addition to those imposed by businesses
The economy will almost certainly go into recession, and globally as well, but the big question for many companies is when the recovery comes and how to position for that.
“We know from the SARS experience that there will be a strong rebound. What we don’t know is when that will be.”
On the mooted hollowing out of the office market, Mr Morrison was far from convinced that would happen.
The trends towards connectivity and collaboration, especially in CBDs, was way too strong, he said. They were embedded in modern life and modern economies.
“I don’t think it’s the death of the office building by any means.
“We’ve had an explosion in technology and the ability to work remotely and we’re getting more sophisticated but what we’ve seen through that is the growing importance of the CBD and place. Whether through a health precinct, or education precinct, or retail precinct, place is more important because people want to be in a great place.”
That won’t change, he said.
In the meantime, things will be tough.
“The economic impact on the industry will be very significant and this industry won’t be excused from that.
“No one can know how big this will be. We don’t know if we need four or six months of special measures to flatten out the impact of the virus.”