When the only courage is fear – my thoughts on property development post lockdown
These past couple of months under lockdown have not only been exceptionally busy, running a property development company with operations across several African countries, but it has also brought time for perspective. I guess sitting on an island, physically far removed from the coal face, allows for a particular kind of helicopter vision. Most interesting was the reaction of businesses, captains of industry and staff members to the uncertainties and challenges brought on by COVID-19.
Being an avid waterman who loves surfing and diving, living in Mauritius meant it was only a matter of time before I got back into freediving. One of the first things they teach you in surfing and freediving is to relax. In fact, as watermen we spend a great deal of time on breath-holding techniques, which train the body to remain calm when the proverbial has hit the fan. Because a calm body lasts so much longer when panic threatens to tear away your last resolve, and those extra couple of seconds may just save your life.
What I found very interesting was dealing with some of the suggestions and decisions from business leaders borne from fear. How easy it is for us to fall into the trap of just thinking about the bottom line of our own companies, regardless of its impact on anyone else. The one thing that this virus has shown us, is that no one is an island (despite the irony of my current location) and that the world’s connected whether we like it or not with seemingly unrelated actions dramatically impacting us all.
At the outset of the pandemic, I heard a lot of chatter about declaring a force majeure. A knee-jerk reaction without considering the ramifications this may have on every business in the supply chain. In Mauritius, where the tourism sector has been exceptionally hard hit by the lockdowns, our hospitality partners’ approach was refreshingly different. We negotiated on renovations and expansions with payment holidays. Since hotels continuously require upgrades and renovations, what better time to do so than when there aren’t any guests anyway? This was a pragmatic way of keeping parts of the business going and keeping people in jobs.
Although no-one knows how long the pandemic will have an impact on the global economy, what we do know is that how we work and socialise will never be the same. I’m not going to get into the argument of work from home vs offices. Anchor Stockbrokers CIO and real estate expert Craig Smith provides an interesting overview here: http://ow.ly/GbbG30qSxPr
What I have seen in the field is a lot more tenant requirements for personal space and hygiene. We’ve had lots of engagement with tenants on how we can construct new builds to optimise personal space and how the latest aircon filtration technology can reduce the spread of viruses.
Client specifications for communications technology have also increased significantly, especially as far as video conferencing is concerned. Certainly, from our perspective as a multi-national turnkey developer, I anticipate travel to reduce considerably. Not only from a government restriction point of view, but also from a time and cost saving perspective.
Although there will always be a level of one-on-one engagement, the amount of business that can be done on conference calls is staggering. Technology will also likely change the way we train our staff. If one considers the camaraderie between online gamers from across the world, there’s a good possibility that this will find its way into virtual training simulations where staff from across the world can work and collaborate in real time on problem solving.
There will likely be fewer speculative developers after the pandemic. I anticipate that this will bring much needed balance to the market as larger scale developers will be much more strategic on the projects they get involved with. In this regard, collaboration, partnerships, and joint ventures between specialist developers will likely increase further, such as our partnership with Rendeavour in Kenya and some other countries. The involvement and expert guidance from local partners cannot be overemphasised, with Gateway privileged to have access to the likes of Sir Samuel Jonah for input and counsel.
If there’s one thing I’ve learned during this pandemic, it’s to think slow and act fast. If your decisions are based on fear, it’s likely to not be very rational and can often restrict the growth of the business or lead to unintended consequences down the line. As in surfing and freediving, keeping your nerve doesn’t mean you’re not scared. It simply buys you the time to think things through pragmatically. To paraphrase Bob Marley – sometimes fear is the only courage.
Greg Pearson – Founder & Chief Executive Officer Gateway Real Estate Africa