Australia’s economy and property sector will recover from COVID-19, leaders in commercial real-estate say.

In a webinar hosted by the Property Council of Australia, David Harrison, managing director and group chief executive officer of Charter Hall, Carmel Hourigan, global head of real-estate at AMP Capital Investors and Stephen Conry AM, chief executive officer of Australia/New Zealand for Jones Lang LaSalle (JLL) acknowledged that the current situation was unprecedented and was impacting both the broader economy and commercial real-estate tenants and investors specifically.

But they expressed optimism about a recovery once the crisis has abated.

On the economy, aforementioned speakers said Australia entered the crisis from a strong position with modest levels of debt, a robust legal system and a mature market.

As well as making us attractive to foreign investors, this has underpinned the government’s ability to support impacted businesses and workers.

That support – particularly the wage subsidy scheme  – will help to keep unemployment at reasonable levels, maintain existing business structures and promote confidence when restrictions are lifted.

Meanwhile, productivity will be boosted amid a spirit of enthusiasm and cooperation when teams return – a phenomenon Conry says will also see those with employment support restaurants and cafes.

On real-estate specifically, continued low inflation, interest rates and bond yields will mean that property as an asset class will remain attractive.

With tight vacancies across office, retail and industrial property, meanwhile Harrison says fundamentals coming into the crisis were sound.

“I think we will be in a good position to bounce back,” Conry said.

“As for how long it takes and how strongly we bounce back – that’s all subjective and debatable.

“But everybody watching this would be keen to make sure that optimism is there to get back to work and look after our clients and get economy and property sector absolutely moving again.”

Hourigan agrees, adding that the wage subsidy is pivotal to keeping workers connected with their employer and maintaining unemployment at reasonable levels.

“If you think about how much money they are spending, it is different to the US where we hope that we can keep unemployment at a reasonable level,” Hourigan says.

“Let’s assume it (unemployment) hits ten percent. If we can keep it at those levels, which is where the government is designing this package – and if we think this is six to nine months that we are in this sort of situation – and when the economy does start moving again you actually go from ten percent to seven percent unemployment, that actually is a real positive.

“Then it’s about confidence returning next year to get unemployment down to six percent.

“If we can do that, we will come out in a much better position than a lot of other countries.

“I’m optimistic. I’m not in the camp that this is going to be a three year, deep, deep recession. I think it’s a U shaped recovery and I think that we will get through it.”

Outside the macro view, Harrison says real-estate prospects after COVID-19 vary across sectors.

On commercial property, he says the hibernation period will ‘send everyone back to the office’ and underpin greater office demand as limitations and distractions associated with home offices are laid bare.

This contradicts ideas that COVID-19 will accelerate the trend toward remote working.

Whilst recovery in international travel will be slow, meanwhile, the hotel and accommodation sector will benefit from greater domestic travel over the next twelve months as fewer Aussies travel overseas.

In the industrial sector, meanwhile, Harrison says the crisis could see a reversal in the decline of domestic manufacturers as buyers reduce exposure to international trade.

This includes smaller suppliers who have previously struggled to compete against international players.

Retail property, however, may be negatively impacted as more consumers establish online buying habits.

Comments of the aforementioned individuals come as the Federal Government seeks to help business manage throughout the crisis.

As well as multiple measures in general business support, in commercial property specifically this includes by a new leasing code  which will provide rent relief to tenants who have been affected.

Asked about leadership strategies during the crisis, aforementioned commentators talked of several areas.

Harrison says priorities need to be adjusted to afford greater focus to the physical health and safety of Charter Hall’s own staff and those who operate in its premises along with looking after the mental health of workers as they adjust to remote working.

As well, Harrison – who is also National Vice President of the Property Council of Australia – says broader industry advocacy needs to be stepped up.

With the extra attention needed in these areas, Harrison has spent less time on briefings and providing information to his own board and to investment committees – a phenomenon about which he says both have been understanding.

As well, he has made clear to staff that culture, leadership and collaboration will be the dominant focus of performance assessment throughout this period. (Normally, performance at Charter Hall is assessed according to a weighting made up of 50 percent financial indicators and 50 percent non-financial criteria such as customer service, culture, leadership and collaboration).

Hourigan, meanwhile, says clear accountabilities and greater opportunity for people to own tasks are necessary as part of the shift to remote working.

As well, AMP Capital has separated part of its team to focus exclusively on opportunities which will arise once restrictions are over.

This, Hourigan says, is important as ‘tunnel vision’ around survival saw the company miss opportunities in the aftermath of the GFC.

Finally, Conry talks of a need for strong leadership coupled with empathy for people and businesses who may be struggling.

He says Australia is looking to the property sector to lead it out of recovery.

“Like never before, the industry, our people and indeed, the government, are looking for strong leadership to the property sector,” Conry said.

“The property sector is a massive contributor to our economy. We want to keep it that way.”