For some industries, including real estate, the coronavirus has meant rise to a lot of learning and changed the traditional way of working.
The current COVID-19 pandemic has impacted individuals, markets and economies across the globe in more ways than one. The state of the crisis has yet to be completely determined because not much information is available, constantly changing and creating uncertainty. Since the virus is exponentially infectious, its rapid dissemination has rendered new standard concepts such as social isolation, home work and self-quarantine. This capricious scenario makes it important for governments and organizations to have a clearly defined overall course.
In India, the prudent approach of the government has restricted the impact of the outbreak, as it has proactively enforced a nationwide lockdown. The short-term impact is a full shutdown of operations, but the mid- to long-term impact can only be measured until we are in a position to reach the end of the crisis.
However, for many industries, including real estate, the virus taught us some new lessons and changed the traditional way of working. Businesses had to quickly adjust and change to ensure their operations aren’t affected. There are quite a few long-term lessons for real estate developers that have arisen from the outbreak.
Investment diversification of assets is important to lower the risk. Developers were typically investing in residential or commercial real estate, but they realized that spreading capital in retail, safety, warehousing and other segments is equally important in the light of the crisis. By hedging the bets, they are not at risk of losing a significant amount of money as the virus impacts the economy. Furthermore, ensuring that the supply chain is sufficiently diversified and not completely dependent on a single source will in future aid in proper risk management.
Digital Ecosystem is a prerequisite which can not be ignored or postponed any more. The virus that travels from human to human touch has led to an awareness that going digital with Big Data analytics will reduce the individual’s dependability, make it safer and change the financing and execution of deals. New technologies such as AI and the Internet-of-things are here to stay and build fantastic opportunities for the company by making the consumer experience a specific property’s ‘look’ and ‘feel’. The built environment sector should now be aggressively engineering to adopt digital construction, precast, robotics, and drone technologies as the labor challenges will continue to impact the business in the coming times.
Through the use of data, sensing and controlling capabilities can be greatly enhanced allowing developers to manage various operations. Implementing analytics can help developers predict and control some scenarios; integrating and gathering data through the use of machine learning algorithms allows for more intuitive and smoother functioning. Data and analytics can be used to create insights that can be used to obtain informed decisions about location and leasing.
Supply chain resilience is a crucial feature which a developer needs to remember. A service breakdown severely impacts a project by destroying the quantity of stocks. Creating a reliable, versatile and efficient supply chain is imperative in order to ensure that research does not stop in the event of an unpredictable situation, and that projects can be on track.
It is important to create resilience in the business, as the virus has clearly shown us, bringing economies around the world to a halt. It is important that the developer ensure the change from one platform to another happens smoothly and seamlessly without impacting continuity. These circumstances can occur in the future, and the development of nimbleness for project delivery is crucial.
A developer will now invest heavily in performing proper project feasibility studies, in addition to the lessons listed above. Variable cost models can also assist developers in attracting and keeping investors by motivating them to spend capital and making economically viable projects according to each budget. Looking at creative ‘models of real estate consumption’ would help fuel the demand that was languishing even during pre-COVID days.
Keeping in mind, the ‘Four Cs’ can be a good place to start immediately for future business proofing:
Care covers worker, customer and partner thoughtfulness. The freedom to work from home with respect to workers in case of a difficult situation. Maintain genuineness and honesty at work. Adopting, as and when necessary, a collaborative and upskilling approach at work.
Conserve includes cash, supply chain, talent, essential functions, business continuity plans and company quick cover due to any knock-on impact.
Change means rethinking the ‘new normal;’ reinventing and accepting new approach to stakeholder commitments. Redesign to a ‘resilient brand’ supply chain.
Construct that includes building resilience through redundancy, flexibility, modularity, prudence and evolvability.
The lessons we have learned from the COVID-19 situation are, to say the least, important. We have learnt to adapt and find new ways to balance work and life by living under a lockdown. We found that companies with a higher recovery quotient were constantly looking ahead and able to respond in response to changes in paradigms. They explored different approaches to coping with the changing complexities and produced possibilities where there was none. This knowledge will confidently prepare us to meet the challenges of a ‘modern world’ that we are joining in the coming days. It will remind us that each challenge has an enormous code of opportunity concealed in its DNA. Via absolute faith, strength and creativity, one must realize this.