Posted on Dec 01, 2020
As we look back on the industrial property sector of 2020, it is with very sobering emotions. Worldwide millions have lost their lives due to Covid 19, and for most others there has been major upheaval in their lives.
In New Zealand the major lasting impact has been economic. In our sector the early part of the year was dominated by the political message of “Be Kind”. But of course that didn’t apply to your landlord. Landlords were expected to hand out wholesale discounts on rentals. Of course insurance, rates, groceries etc were not discounted at all.
But we got over that. Almost. There were of course large cashflow holes for most landlords, and some tenants who just didn’t make it out the other side. And a lasting effect of the discounts landlords had to hand out, is that many tenants are now emboldened to expect further discounts on other costs.
And then we saw a very uneven economic rebound. Some businesses are booming, while others rely on taxpayer funded handouts to stay in business. And then there are the unintended consequences of quantitative easing and ultra low interest rates – capital pouring into property assets, forcing prices up and yields down. And there was a problem that we haven’t seen in the market previously. With a sub 1% vacancy rate in many areas there were tenants with a final expiry on a lease looming, but with few options to go to.
Whilst it has been a challenging year, challenges always present opportunities. There have been some remarkable highs and lows. Expedio has expanded our activities outside of our traditional South Auckland base which has meant working with a whole new cohort of agents. In the South Auckland Industrial market it has been pleasing to see those agents who have enhanced their skillset and embraced their understanding of customer service, work ethic and the ways technology can be used effectively. Counter to that there will always be those who fall by the wayside as they fail to adapt to a changing environment.
Expedio would like to thank all those agents we have worked with over the course of the year. We look forward to 2021 with real anticipation. We know that there will be even more opportunities, and we know that those agents who seek them out will be rewarded.
Best wishes to all for a relaxing and safe festive season.
For a final thought, as someone much wiser than I once said: There is no such thing as a bad property – just a bad price.