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No other sector was quite as affected by the COVID-19 pandemic as office and retail. Imposed business closures, shorter working hours, requirements for working from home, and social distancing restrictions disrupted the two sectors and completely altered their daily processes.
While many are skeptical about just how soon things will return to normal, some industry leaders share a positive outlook about people returning to work in offices and shopping at the mall.
Canadian businessman and CEO of Brookfield Asset Management, Bruce Flatt, shares his views on what the future holds for office and retail.
Although many businesses struggled and are still struggling, the e-commerce sector underwent massive growth during the pandemic. With most Canadians turning to online shopping in the face of business closures, e-commerce in the country took off.
But the future of retail doesn’t lie solely in the digital world. According to Flatt, shopping malls and retailers need to focus on creating a balance between online trading and physical store presence.
We’ve already seen several examples of just how beneficial the combination of online and offline presence can be. Shopping malls and retailers across Canada showed great ingenuity during the pandemic by offering online orders with curbside pick-ups. Several stores began offering local deliveries to loyal customers or partnering with Uber Eats and similar services to connect with their shoppers.
Other industry leaders and Canadian retail CRE investors believe diversification is the key to success in the post-COVID world. Mixed-use spaces are increasingly on the rise, proving to be some of the most lucrative investments in the long run.
Brookfield is in the midst of massive changes, slowly restructuring its portfolio and placing assets with institutional investments, taking them out of the public eye. They had their fair share of challenges caused by the pandemic, but its New York offices have mostly been back to normal since June 2020.
Brookfield even needed an extra floor and a half in New York to make space for the employees who would spend most of their time away on business travels pre-pandemic. Only a fourth of the staff currently work from home until vaccinations become widely available.
Using the massive return to offices in Shanghai, Australia, and Dubai as an example, Flatt believes workers will get back to normal sooner rather than later.
Physical proximity and collaboration are an essential part of building and maintaining company culture. Workers will be excited to return to offices and continue their water-cooler conversations, according to Flatt.
The pandemic has shaken up the office and retail sectors, but some industry leaders believe that people will be lured back to offices and shopping malls. While no one knows exactly when that may be, one thing is for certain is that people are anxious to get out of their homes and continue building personal relationships. This is welcome news for the Canadian office and retail CRE market.