The user, key engine to achieving a healthier tertiary real estate market
At the end of 2019, the real estate market kickstarted its regulation independently to the health crisis. Indeed, a significant dichotomy between the offering and demand was compromising the relationships between landlords and tenants. This led to an important impact on the speculation regarding the values of transactions and weak support measures; mostly the agreements that bared a risk mainly affecting the users. The lessors settled for, upon the recommendation of their suggestions, the legal minimum. Overriding some regulations, the execution of a rent bidding war has unfolded before our eyes. Our clients therefore find themselves signing leases baring the full weight and responsabilities.
It’s been nearly a semester since going back to work has been able to be put in place in a more or less affirmed manner. The office is at the heart of debates for a good few companies. YES, they have good days ahead. Companies have witnessed the importance of this tool when it comes to their functioning, productivity, team work, social and societal role.
Our relationship with our place of work has completely shifted. The precept of the assigned office has been overall questioned. The tendency aiming to increase the appeal and quality of collective spaces has accelerated. The collective is at the heart of new expectations. The office is therefore the centrepiece of the good functioning of any organisation. Incidentally, some people, in reaction to this shift and for economic reasons, have bet on a 100% home office. The vast majority of these innovators have come back to this conviction, for a more hybrid organisation.
Balanced out relationships
After an observation period, the real estate market maintains a certain dynamism even though the transaction volume is below that of previous years. Dignitary signatures have been made official in the last few months, mainly regarding high quality assets. Admittedly, we go to the office less frequently; when we do, the experience must be stronger.
When it comes to the economic component, we can witness a substantial increase in the support measures, multiplied by 2 and even sometimes 3 depending on the sectors in comparison with the numbers in 2019; it’s an ephemeral plaster to ensure high revenues for the lessors in the next few months. What about the readjusted funds tendency regarding lease values? To this day, we can safely say that it is effective! In relation with the economic context; the regulation of the market prices is initiated, mainly on the ‘active’ assets, standard services (between -3% and -8% of the annual rent); a lever to try make a difference on a market where the offer is available and skyrocketing. Finally, because users can find again a requirement on available assets. It is not longer necessary to rush into the decision making.
Now, you’ve got the power !
At the end of 2020, the user becomes once again the main actor on our market. The keys of reading have fully evolved.
The current context imposes lessors to go back into taking into a consideration the expectations of the final users. Whether it be on the financial, technical and offered services aspect but also the contractual aspect – each professional provider enriches its approaches and offerings. All the better! This method is complemented by the proactivity of the service agreement providers, these lessors 2.0 that have perfectly understood the importance flexibility; but often at incoherent rates! The border between these two professionals is shrinking with a fresh perspective full of interest: these classic lessors are now offering flexible leases, without the savoir-faire of their professional lessees. On the contrary, the stakes of economic recurrence push some service agreement providers to become providers solely dedicated to the lessors. What will the impact on the final user be?
Transparency therefore still isn’t the watchword on our market. A marketing fort is still being deployed by professionals in the real estate sector. However, finally, the market works in our favour and users have the opportunity to become once again the main actors of the transformation that the real estate market must carry out; no matter the sought after solution (classic lease, flexible lease, short-term lease, etc), you hold in your hands the keys to a successful real estate project. Independent consulting, token of transparency, expertise and performances will significantly contribute to the success of the operation. The user has been an accomplice in the real estate bubble in the past few years; do not underestimate your influence on our market!
Nicolas Hanart, Director Real Estate