Construction Professionals as leaders, working with government, businesses and the society to manage the challenges of covid-19

Paper presented on 16/6/2020 at a CED webinar, 

The fear of death, based on covid-19 impact on human biology resulting in the destruction of capacity and lifestyle, has been successfully exploited by governments, with its sustained media coverage. Society needs to rebuild  and rebuild it must, else it will die a slower death. To rebuild, the activities and participation of builders comes into focus. In all human endeavors demand precedes supply, so this paper is premised on examining the demand projections first, possible mitigating and long term strategies in managing the effects of environmental and biological disasters.

EFFECT: pandemics unlike environmental disasters impacts, human, lifestyle, demography, and consumption patterns of the people. This reflects on real estate use demand, which in turn influences engineering and design parameters.

Change of Use/Demand: covid-19 will most likely result in change in uses and increase/fall in demand for all real estate sectors, 

  • Office/Retail sectors: leases/rentals make up a large % of user demand, and has seen the highest negative impact from covid-19. the worst affected being rental default for office/retail spaces. A prolonged default may lead to property voids, impacting loan repayments and negatively impact the bottom lines of the financial system. The aforesaid has reinforced the assumption that these types of real estate market may slowly die off as more businesses go online.This projection, may apply to the creative industry, and marketing office functions, that deal in information flows with little or no physical contact. Back office functions, jobs that handle physical goods, those that require mentoring, compliance monitoring, culture exchange, indices that determine a companys’ competitive advantage can not be done online/remotely. Demand may fall in the short term, but innovative methods for dealing with and improved cures for the virus, coupled with the need for social well being provided in work places, may result in a quicker resurgence of demand for offices/retail spaces. Workplaces provide avenues for social interaction, necessary for work life balance, This and the fact that financial instability from default, may be major drivers for a short period of fall in demand. Realtors can do well to wait out the period by renegotiating leases, explore shared space use,grant rent rebates and % reduction while applying the rent deposits to offset shortfalls.  To cushion the current and near future fall in revenue, due to income losses, financing loans should also be renegotiated as they lobby governments for palliatives and property tax exemption.
  • Residential sector: This sector will most probably benefit from the covid-19 imposed lockdown. Shelter is a necessity after food, and provided for in that order. The trend for working from home, no matter how short the duration, will translate to a secure residential market. The inability of tenement home dwellers in high density neighborhoods to comply with social distancing and other covid-19 protocols presents opportunity for development of large scale affordable residential housing, and new frontiers in design, material and construction for the built industry. Practitioners will benefit, not only in new structures, but in upgrading homes to meet the demands of social distancing and work from home.
  • Industrial/Places of Worship: How and where people worship has effectively changed, with worship carried on remotely. The effect on this type of real estate may see in Nigeria a reversal of the conversion in the 2000s, of industrial complexes into places of worship back to industrial uses, if churches remain empty and investment into production and manufacture of health care accessories continues.

For now, data from interviews validate rental defaults and demand fall for office/retail rentals. Only one new rental was recorded in three 3 months in Ikeja and environ, this is expected, given that the lockdown is still active. The above projections remain to be validated by time.

Construction Companies Roles: practitioners in the built industry by virtue of their function, are leaders in infrastructure development necessary for economic growth. Construction companies are in the front line with medics and firemen, in mitigation efforts during disasters. They provide personnel and equipment to evacuate, extricate, erect temporary structures and in rebuilding. These services are required through planning to resettlement stages. The lock down period is an opportunity for construction companies, to engage in research activities on material, processes, innovative technologies, with focus on skill upgrade and capacity building for effective and efficient disaster response. Erecting temporary health facilities for pandemics and shelters for environmental disasters are examples where quick response is required. To meet this responsibility, there is a need to develop a synergy with all actors in the built industry through participatory interventions, corporations in the long and short terms, interface with:

  1. Professional Bodies: to collate and collect data for research into material, skill upgrade and capacity building. Produce guidelines for accreditation of companies with capacity in equipment and material provision.
  2. Staff/Firm relationship: provision of innovative health protocols for staff use, sanitizers, food sheds, toiletries, waste disposal, cleaning technology, masks, improved staff shifts scheduling.
  3. Clients: all ongoing projects are negatively impacted, from delays, cost/time overruns, staffing to financing and mandated regulatory costs as in 2 above. To address these, all subsisting contracts need to be analysed to reappraise the contractual and legal obligations, including supply chains, to meet possible obligations, negotiate some form of relief in schedules and delivery time. 
  4. Corporate Entities: team up with oil, manufacturing, technological organizations to sponsor research in material and develop cutting-edge technologies that can provide safety protocols for service delivery. 
  5. Health Care Providers: obtain imputes for joint research into new design/redesign methods for health care facilities, modular and mobile.
  6. Finance Institutions: can provide low interest equipment acquisition and construction facilities in the long term and for the short term, an interest free project completion funding, or renegotiated interest payment on existing facility.
  7. Governments: needs to in the short term provide some form of palliatives like tax exemptions/holidays to mitigate the effects of their imposed restrictions.  A long term mutual beneficial synergy will rest in a jointly developed regulatory guidelines for compliance certification, maintain a database for firms with competence and capacity for quick response in each of the 774 local government areas. Introduce infectious disease rating code. Lobby for new laws, to empower the sector in terms of legal obligations for future occurrences.

In all tremendous opportunities exists for a post covid-19 real estate construction industry. Practitioners must take advantage, by proactively identifying, areas of increased demand as reflected in the property market, improve technical and personnel capacity and must upgrade skills and equipment.

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