Editorial

Pages1-2
Date21 January 2020
DOIhttps://doi.org/10.1108/JPIF-02-2021-170
Published date21 January 2020
Subject MatterProperty management & built environment,Real estate & property,Property valuation & finance
Editorial
An uncertain catalyst for change
Wildcards - There are certain events, sudden and shocking in their occurrence, that have a low
probability of happening, but a potentially very high impact if they do. This includes as major health
scare such as the onset of a global pandemic
John Ratcliffe (2011) [1]
It is fair to say that none of us expected 2020 to turn out as it did. That is not the same as
saying that a pandemic was not expected. As the quote above highlights, pandemics have
been on the radar of governments and corporates for decades. It was never a question of
if; it was a question of when. The truth is that most people do not want to contemplate
the worse. We all are hoping and praying that 2021 will be better, that the virus will abate
either naturally, through natural herd immunity or, more likely, with the aid of a vaccine,
but that illustrates that we tend to only focus on things getting better not things getting
worse. None of us were contemplating this wildcard back in 2019. We chose not to
entertain bad news.
In 2000, I was working with the Royal Institution of Chartered Surveyors (RICS) on a
project to look at the impact on property values post a terrorist attack (in London). I spoke
with nearly all of the big property consultants in the hope that we could run a seminar on the
topic to try to decant out some understanding of the possible scenarios of various types of
attack. I was also working with decision theorists from the Ministry of Defence. We were keen
to use scenario planning to get handle on the possible long-term outcomes of any such
attacks. This was to be an objective exercise detached from the personal suffering and loss.
But the project never happened, as the universal feedback was that the possible participants
did not want to consider such a situation. And I have no censure for that decision, but it does
highlight our unwillingness to consider bad outcomes. Sadly, since that date, we have had
real-life examples of such atrocities, and we have had to deal with short- and long-term
market changes that came with those shocks and the introduction of uncertainty in our
decision-making.
It has been the same with this pandemic; we now find ourselves in a world of uncertainty.
Back in March 2020 when the pandemic was declared, all markets stopped. It may have
looked like a crash or a recession, but the truth is that markets just paused. Property sales
stopped, lettings were postponed and developments were put on hold. And everyone paused
too. We all waited. Most of us turned to online suppliers, after a couple of weeks, these
companies started adjusting and fulfilling the new demand. Initially it was slow and quiet and
then the demand changed to a flood, and Amazon and many others started expanding. At the
same time, as commentators were mourning the death of the high street, a quiet revolution
was happening. This fed into the property world and deals started happening (at record
levels) for logistics properties. Rents rose and yields fell. Likewise, as more people worked at
home, the desire for open space and the realisation that commuting was not necessary, but it
led to a boom in the demand for family properties with gardens in provincial towns. In other
words, the world adjusted.
And it will continue to adjust. There will be winners and losers, but the human race has a
history of adapting and changing. COVID-19 was simply a catalyst for change. Ahorrible and
blunt agent that nobody wanted, but it brought about changes that would have happened
anyway. Retail was changing, the need for offices was changing and the expansion of
logistics was happening. It was all going to happen anyway just not in six months. And that is
the crux of the COVID-19 economies. It was a sudden shock to the system, but one that has
Editorial
1
Journal of Property Investment &
Finance
Vol. 39 No. 1, 2021
pp. 1-2
© Emerald Publishing Limited
1463-578X
DOI 10.1108/JPIF-02-2021-170

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