The real estate industry is now facing great challenges in the post-pandemic era. The decline in face-to-face contact has led to a series of adjustments in business, financial, and personnel management. As a leader in modern real estate management, Sea to Sky Management (SKS) has taken the initiative to creatively create a new path for real estate management in the post-epidemic era by using digital and integrated services. Yongmin Zhu， the CEO at SKS shares his insights on the real estate industry trends and the company’s development in 2022.
Mr. Zhu, can you elaborate on the impact of COVID-19 on the real estate industry?
Absolutely! Forbes reported a 53% drop in housing supply in 2020 due to supply chain issues and operational issues caused by COVID-19. As telecommuting became the norm overnight, rental income fell sharply as companies cut costs by working from home or opting for smaller workspaces as hybrid offices. However, the outbreak does not seem to have affected the housing market.
How do you evaluate the long-term effect of COVID-19 on the industry?
That’s an interesting question. Demand for multifamily properties is still high while rents have returned to peak levels. While the housing market remains competitive, how to reduce supply and rising manufacturing costs to ensure supply meets demand are crucial for the residential real estate market to stay positive. Even though the commercial real estate market is expected to struggle to adapt to the growing demand for working remotely, the result still remains uncertain since it may take another fiscal year or even longer to accurately assess the impact of COVID-19 on it.
In your opinion, how will the industry react to the impact of COVID-19?
The economy rebounded faster than expected in all sectors, including housing. Real estate and property management trends suggest that while the industry has adapted to the pandemic, some aspects may be changed permanently. A significant change in high-level property management agencies is the centralization of cash management, which is the complete opposite of the usual practice of decentralization. Keeping cash management centralized enables real estate investors to identify efficiency issues and adopt a more streamlined mindset toward their spending. Real estate professionals are attempting to balance preserving existing portfolios and strengthening their competitive assets to create a win-win for their business such as increasing the number of employees and consumer loyalty.
How can you ensure your productivity in quarantine?
The best way to ensure your productivity is to plan the future ahead. Entrepreneurs always focus on the result. And that in real estate stands for rethinking established standards. As the demand for working from home grows, the increasing customer demand for more sustainable and environmentally friendly housing will be the primary concern for the real estate market to keep large-scale commercial office space still profitable.
To boost productivity and entrepreneurship in real estate development is to embrace digital development. Customer experience will become more critical than ever as the industry becomes more competitive following the real estate boom. SKS is diversifying its revenue streams, prioritizing tenant experiences, and pursuing digital strategies to stand out from the competition. The pandemic has increased the need for a shift in strategy.
What is the trend for the real estate industry in 2022?
The most significant two trends are digitalization and virtual reality. 2022 could be the first “post-blue” year of the housing market. Real estate remains a competitive asset, rebounding from unimaginable conditions and optimistic for 2022. Niche real estate sectors – data centers and cold storage, are attracting more investment as they become the mainstream. The resilience of the property market that is combined with low-interest rates and foreign investment, means competition in multi-family and industrial niches would remain intense. Virtual reality and augmented reality are essential. Using virtual technology can help homebuyers visit their future homes without leaving their current homes. Another data management system that helps keep up with the latest trends is that by synchronizing data internally, cloud storage solutions have also become a sophisticated part of ensuring productivity, simplifying daily tasks, and managing projects. We are trying to assuage investor concerns by working with partners.
What has SKS achieved so far in the post-pandemic era?
In the post-pandemic era, we primarily focused on commercial and residential properties. Providing convenient life experiences for different groups in the right places helps owners benefit from its expertise and data management skills. Our modern Management system has changed the traditional service model and brought residents a more convenient service experience by familiarizing the property and identifying its weaknesses and any problems that might arise. We also run under the rule of keeping costs and maximizing profit margins by managing investment assets. We are committed to accurately assessing its customers and minimizing risk to achieve “good predictable returns.” So far, so good. We hope our strategies will bring more solutions and trigger new growth in the real estate market.