Housing And Development In The Wake Of COVID-19By Pedro Alcalá | Thu, 05/14/2020 - 18:18
The Mexican real estate sector shares bonds and synergies with some of the economy’s segments that have been affected the most by the ongoing COVID-19 crisis, particularly the tourism and travel sectors. While concrete numbers that demonstrate this impact in Mexico are not yet available since reactivation is still a long way away, the case of Spain can be used as a measure of comparison. According to a recent report from Yahoo! Finances, there were 55,000 housing and development companies that employed a total of 150,000 people in Spain at the end of 2019. By the end of this year, a quarter of those companies are expected to be gone, which, combined with layoffs from remaining companies, could lead to the loss of 35,000 jobs.
A report published this week by sector leader Cushman & Wakefield (summarized in an article by Inmobiliare) identifies five types of real estate activity that it predicts will benefit from a post-COVID-19 boom. The first one is self-storage facilities, since COVID-19 shutdowns have given potential customers of this service a new awareness of the value of preparedness in the event of a catastrophe that would require temporary housing movement. The second one is data centers. It is getting easier to invest in data centers thanks to real estate investment trusts. The third one is laboratories and office space reserved for medical companies. While office spaces do not have a bright future, this changes when it comes to medical and biotech companies. The fourth one is residential complexes for retirees and the elderly. The vulnerability of this population has been starkly revealed by COVID-19. People who are scheduled to enter senior facilities will have to be observed in more ways than usual. The fifth and final real estate activity with potential is student residences, which could see a bright future given the degree to which they represent guaranteed long-term occupations from their tenants.