While some of the commercial premises in the cities are facing difficulties from decreased foot traffic, the increased number of people working from home is benefiting some of the suburban shopping centres.
La Trobe Financial chief investment officer Chris Andrews said the outlook for the commercial property market over the next few months will vary from sector to sector.
“Anecdotally, what we’re hearing is that some of the smaller commercial premises such as small shops, coffee houses in the cities, particularly in the CBD, are experiencing some difficulties with decreased traffic as a lot of people are working from home. [However], some of the suburban centres have actually picked up in activity levels,” Mr Andrews explained.
“All those people who were formerly going into the city and going out and getting their cappuccinos or what have you are now doing that in their local area.”
Mr Andrews said COVID-19 is also accelerating some pre-existing trends, including the trend away from brick-and-mortar retail to online shopping.
“There’s little doubt that the increased amount of time spent at home will accelerate that trend, which will place increased pressure on brick-and-mortar retail,” he said.
“[However], this is a tailwind for industrial warehouses and distribution centres.”
Mr Andrews said the economy is still coming out of a hibernation phase following the restrictions that have been in place in the past few months.
“What markets are waiting for is the economy to get back to work. As [that occurs] and the country gets better at dealing with any spikes in cases and finding a new normal, that’s when you can expect property markets to start to return to normal levels of activity and growth.”