What real estate segment will heat up in the Covid-19 pandemic?

The Covid-19 pandemic has clearly had short-term effects on many segments of the real estate market in Vietnam. However, this difficulty has triggered a new development trend in the market, in which some sectors can benefit from this trend.

What real estate segment will heat up in the Covid-19 pandemic?
The cold storage warehouse real estate group is given a new trend when it receives great demand

According to Vietnam CBRE, before negative effects on the real estate market, investors need to be more active in change. The market will have more potential new development trends in the long term. In particular, a number of segments can benefit during this period.

Industry and logistics

According to CBRE, e-commerce sector will be development motivation for the logistics industry in 2020. However, in the context of a disease outbreak, it increases online sales and accelerates multi-retail form for channels, the addition of warehouse supplies in and around major metropolitan areas is essential to accommodate the spike in last-mile deliveries.

Besides, the US-China trade war has caused many manufacturing companies in the world to diversify their supply chains to other Asian countries such as Vietnam, Thailand, Indonesia, India and Bangladesh.

Outbreak of pandemic and its negative effects on the global supply chain will continue to drive this long-term shift. Especially when companies are working to minimize their dependence on China and avoid concentration of production facilities in a certain country.

The real estate group of cold storage warehouse is given a new trend when receiving great demand stemming from increased sales of fresh vegetables and food online. This demand will boost tenants’ demand for cold storage warehouse systems in the coming years

Application of automation in logistics spaces is also expected to increase as suppliers seek solutions to minimize manpower dependence and prevent operational disruptions caused by pandemic in future.

This will change way which operators set up and build systems for their distribution centers and warehouses. Development of technologies such as drones and Automated Guided Vehicles (AGVs) will gain more motivation as they can help delivery companies operate in   quarantined areas and provide contactless delivery.

Timely adaptation is also expected to play a more important role in operating logistics sector as many suppliers run into problems with a spike demand in the weeks following the pandemic outbreak

In China, multi-channel retail chain of Alibaba, Hema has recruited employees who temporarily quit restaurants in order to meet the surge of online orders.

Flexible offices will be crowned

With the pandemic outbreak, CBRE believes that flexible workspace model will be tested for feasibility in many markets.

In recent weeks, governments and private organizations in Singapore, Hong Kong, Macau and even some cities in China have forced or advised employees to work from home to minimize spread of disease.

What real estate segment will heat up in the Covid-19 pandemic?
Trend of working from house

Use of space in flexible offices will be adjusted due to requirements to ensure density of exploitation to limit disease transmission. At the same time, employees will become more flexible at work and adapt to flexible workspace after this outbreak of pandemic

Additionally, tenants will focus more on the building’s friendly features for health and environment to ensure the growing requirement for employee health maintenance.

Buildings with sustainable and health-friendly features, related to air quality, ventilation, and environmental features in the building to enhance employee’s comfort, will be attract more rental needs in the long term.