By Saleh Abdullah Lootah
It is time to start thinking about next steps, says Saleh Abdullah Lootah, CEO, Lootah Real Estate Development
The coronavirus (COVID-19) has brought about an unprecedented global impact on businesses across various sectors.
The supply chain disruption caused by the preventive measures and restrictions implemented by nations have sent global stocks tumbling and led businesses to momentarily shut down, thereby resulting in substantial revenue loss and colossal redundancies across the globe.
Such a financial blow has also steered many experts and international organisations on a 180-degree turn in terms of trade expectations. For one, the International Monetary Fund (IMF), estimated that almost all countries will undergo a major economic difficulty as the global GDP is seen to shrink by 3 per cent within the next few months. Moreover, the World Trade Organisation (WTO) expects world trade to fall by 13 per cent to 32 per cent as the pandemic delays logistics and disturbs the economic activity.
But whilst sectors, including the real estate, traverse the economic pressure posed by the pandemic, there is still a high level of buoyancy amongst industry leaders regarding the ability of the UAE to bounce back. For one, the government has demonstrated its robust tenacity and knack to adapt to changes and market realities by rolling out smart solutions that helped cushion the disease’s blow on businesses. This reflects how the UAE is a model of stability and resilience through any crisis.
The leaders have enforced advanced initiatives and measures to efficiently cope with the disease, including the employment of the National Disinfection Programme across the country, as well as its game-changing testing capabilities that set the bar high on a global scale. The government has also initiated a series of groundbreaking economic responses to stabilise the market from the disruptions caused by the disease, including stimulus packages worth Dh256 billion. Its fiscal policies, such as rental freeze and waiving of fees, have also helped local businesses and SMEs guarantee business continuity.
Moreover, they have also exhibited solidarity with the world by sending humanitarian aids to other countries.
These multi-prong measures have cemented the UAE as a global leader for other countries to follow—underpinning the momentum of trust between the country, its people and the businesses that operate from it.
Inspired by the government’s suppleness in creating a fast response from the crisis, Lootah had also implemented immediate procedures that allowed us to avoid disruptions in our operations.
For instance, we have focused on sterner hygiene measures for both our employees and tenants, including the endowment of hand sanitisers in high-traffic areas, limitation of people in elevators to ensure social distancing, placement of posters promoting health and safety, disinfection of surfaces that are frequently touched, and temporarily closing down amenities in all of its properties, including gym, pools, sauna, and spa. To ensure continuous service and business sustainability, which remain Lootah’s top-most priorities, we also re-assessed our cash flow and adjusted to a remote working environment as per government directives.
As one of the leaders in the industry, I stay assured about the sector recuperating from Covid-19, mainly due to the assistance provided by the UAE government—the measures that have tremendously helped businesses avoid a major slump.
In addition, the real estate in the country also comprises revolutionary leaders who always come up with sustainable and shrewd solutions to further advance the sector. This pandemic will unleash their potential by adapting new approaches that will persist in the long-term.
As we go into the era post Covid-19, we see various trends swarming the real estate market, all centred at enriching the quality of life through automation principles, as well as developing properties equipped to survive future outbreaks.
One such trend that will emerge are the lower-density properties and locations, as various tenants and potential investors are now opting for livable spaces that pose a lower risk of contagion. Building layouts, in addition, will see a major revamp through adding spaces that contain enhanced safety features.
Mixed-use community development will also see a rise, as developers will take into consideration residents who are now becoming extra vigilant about health standards. In these types of development, the idea of a “community within a property” will be introduced — blending commercial, residential, and industrial activities into one location, thereby allowing tenants to abstain from doing needless travel for a whilst to avoid crowded places.
Of course, digitalisation and digitisation will be major focal points in all sectors as the world reels into the new normal, and this is no different in real estate. The pandemic has fortified the need for all sectors to upkeep the country’s vision of digital transformation, and we are expected to see many businesses adopting the usage of artificial intelligence and smart solutions. In real estate, the demand will shift towards touchless and contactless technology across all operations—including online business development and customer service, long-distance collaborative work, and contactless mechanisms.
Lootah has been harnessing its IT infrastructures to strengthen its virtual reality capabilities, and we forecast that most UAE developers will follow suit in employing virtual showrooms and sensor technology, such as voice-activated elevators, hands-free light switches and mobile phone-controlled room entries.