A “surprisingly strong” recovery from COVID-19 means Australia’s commercial real estate sector is in better shape than it would appear, according to Surga Central.

The commercial proptech company has collated nine months of enquiry data from across the country to document how the various markets have responded to the pandemic disruption.

The figures indicate national enquiry levels for commercial property are currently about 95 per cent of what they were pre-pandemic, following solid improvements from both the first and second waves.

National commercial property enquiries by month (February-September). Source: Surga Central

Australia’s two biggest commercial markets have been where the most significant change has occurred, with Surga research showing NSW was able to exceed pre-pandemic enquiry levels in June and has since remained above the levels recorded in February.

In Victoria, a V-shaped recovery was seen earlier in the year as the first wave was brought under control. 

The research shows that an improved September performance, coinciding with a significant drop in COVID cases, is a promising early signal that a V-shaped recovery can be repeated after the second wave.

Surga Central believes an easing of restrictions on commercial property inspections, which remain in place despite being allowed for residential listings, could be fundamental in ensuring that enquiry momentum can be maintained and converted into lease and sale transactions.

Enquiries in Victoria vs NSW (Feb=100). Source: Surga Central

CEO Steve Clark said it was clear the pandemic’s impact on the sector had not been as dire as some had predicted.

“If you are in an economy such as Australia, which has done well with the pandemic, you can expect to see a positive correlation between the ability to control it and the capacity to go out and do business,” he said.

“If you look at the monthly volumes of enquiry, there was a collapse of more than 40 per cent in national enquiry during March and April as the pandemic began, which was followed by a very sharp recovery, and by June, perversely, the number of enquiries were greater than when the pandemic started.

“It shows there is a pretty strong underlying demand for commercial property from where we stand right now.”

For Surga Central Director Gary Clark, who is based in the UK, similar trends had been observed in the British market.

“We saw the same pattern of behaviour among British agents in response to the national lockdown in the UK,” he said.

“Teams were scaled back as a result of furloughed staff and people switched to virtual viewings.

“The point of change for us is probably two or three weeks ahead of Australia’s and we have experienced a steeper decline across July and August.”

According to Surga, one of the trends that remained consistent throughout the onset of the COVID-19 was the role of technology in assisting commercial property enquires.

Specialising in digital marketing solutions for commercial property, the company assists agencies through enquiry capture data collected from sites such as realcommercial.com.au.

Source: Pexels.com.

Key statistics from Surga show two out of every three enquiries in the modern world - including during the pandemic - are coming in outside of working hours, with a quarter coming in on the weekend.

They also reveal that during the working week, as many people make an enquiry between 6pm and midnight as they do between 1pm-6pm.

Mr Clark said there had been an acceleration of technology’s role in the initial contact between a buyer and an agent since the pandemic.

“People are not going to wait for you to answer the phone,” he said.

“If you come from a culture of ‘We don’t need to do anything, they will come to us’, we suspect you are going to get wiped out because the pandemic is changing the nature of how real estate enquiries are received.

“In this modern world, when enquiries come in, you need technology to control them, no matter whether there is a pandemic or not.

“People want someone who is able to deal with them relatively quickly with professional information.”

For more information on Surga Central, email Steve or Gary Clark via the details provided below.

Click here to download a copy of the report.

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