Altus Group Report Reveals Pandemic Fueling Wait-and-See Approach by Global Property Developers While Accelerating Digital Transformation

Uncertainty from COVID-19 intensifying cost escalation, trade and labour shortages, and investment risks for global property development industry

TORONTO, Sept. 28, 2020 (GLOBE NEWSWIRE) -- Altus Group Limited (“Altus Group”) (TSX: AIF), a leading provider of software, data solutions and independent advisory services to the global commercial real estate industry, today released the Altus Group Global Property Development Trends Report, which provides an outlook of the property development industry navigating through the disruption from the current global pandemic and delivers insight into the key business imperatives developers are implementing to build resilience in the new normal.

According to the report, which is based on a global survey of over 400 property development executives along with in-depth interviews with top industry leaders, the pandemic has been a catalyst for change in the development industry by accelerating trends, intensifying challenges and renewing the urgency for digital transformation and technology adoption.

“It’s evident from the report that the global development sector is facing a complex set of challenges due to long-term market pressures, many of which are exacerbated by the pandemic and its evolving impacts,” said Scott Morey, Executive Director at Altus Group. “However, the industry is recognizing opportunities balanced with a cautious approach while leveraging digital-based solutions as a foundation to help carry it through this period of uncertainty and into the recovery stage.”

Current market forces, combined with COVID-19, creating significant uncertainty leading to a wait-and-see approach

• 67% of development executives said tenant/occupier expectations and preferences have a major influence on development planning. This is compounded by the role the pandemic is currently playing in the built environment as occupancy use and building design now have the potential to significantly evolve and impact the market.
• 74% said public sector infrastructure investment (such as transit hubs) has a major influence on development planning. While shorter-term pandemic support is a current priority in many regions around the world, this suggests future economic recovery plans stemming from new government investment in public infrastructure will continue to be a major factor in development planning.
• 68% said that the risk of a cycle downturn has a significant impact on their decisions regarding new construction investments, with distressed asset acquisitions (57%) and change in asset/portfolio mix (66%) viewed as more of a risk than an opportunity during a cycle downturn. These factors are all contributing to many development leaders taking a wait-and-see approach.