Coronavirus has decimated many industries/sectors since March – in particular, hospitality, travel and tourism. It is no wonder then that many are going out of business and more commercial office space is becoming available. Add to this the fact that many large companies aren’t returning to their offices in city centres perhaps until 2021 and then you also have all of those other businesses that rely on lunch time and after work trade struggling as well. Even the likes of M&S have had to shut numerous city centre stores which did great business on lunch times because they are still like ghost towns.
This has lead to a strange situation in the commercial property market where there are plenty of offices free but not at the size that people are looking for. If you’re looking for a large office then in all likelihood you’ll be able to get a great deal at present, the problem is that many larger businesses are downsizing in to the kind of size where there are already the most businesses, this has lead to an even more competitive property market for the size of office many companies would be looking for. The only difference now however is that businesses are more than willing to just walk away, they don’t want to take the risk on at the moment so unless they do get a good deal they’ll leave it and continue to work from home wherever possible.
Another thing to consider when looking at the amount of commercial property for sale is how companies such as WeWork and Regus have been affected by the pandemic. These office building held up to 100 small businesses in one single building and the nature of Coronavirus and how it spreads in communal areas has directly impacted them. WeWork recently got a $1bn bailout from a bank to help see them through the crisis – but what about all of the businesses who used to be in them? Well there are many very small businesses in there, 1 or 2 person startups who will in all likelihood just work from home but there are also lots of 10-20 person businesses who will now be looking for their own, non-communal office space. So once again at the lower end of the spectrum the commercial office landscape is healthy and there should be plenty of interest. At the higher end though where the large companies used to be, in the most expensive offices, it will be a real struggle and I think we will see a lot of partitioning in to smaller offices start to happen.