How SA’s latest Covid-19 lockdown will impact commercial property

The lockdown will become a massive issue for commercial property if it’s drawn out, experts says.

South Australia’s latest Covid-19 lockdown could become a “massive issue” for the commercial industry if it blows out further than a week, industry experts warn.

The snap seven-day lockdown started at 6pm on Tuesday in a desperate bid to stop the spread of a growing Covid-19 cluster in the state.

Commercial SA director Andrew Turner said while the lockdown would impact businesses, it wouldn’t be crippling for the commercial real estate industry – unless it was extended for a prolonged period.

“If it’s short term, seven days or 10 days even, I really don’t think it’s going to have much effect,” he said.

Commercial SA director Andrew Turner. Pic: supplied.

“Once you get a couple of weeks on, it’s going to have a massive effect.

“At some point there’s going to be so many people who walk away from their businesses, which means there’s going to be a huge amount of vacancies.

“It takes a lot of confidence out of people as well.”

Mr Turner said the commercial property market had been booming since the state had come out of its first lockdown about a year ago.

Given people were struggling to secure a property in the competitive residential market, he said many had turned to commercial real estate instead.

“Up until this week, the commercial market has been as strong as it’s been in 30 years,” he said.

“There’s a lot of people getting into commercial because the yields are great.

“But leasing is very different at the moment because people are scared to sign long-term leases.”

He said as long as the lockdown wasn’t drawn out, the market would likely continue to perform well.

Business SA chief executive Martin Haese. Pic: supplied.

Business SA chief executive Martin Haese welcomed state and federal government financial relief to support workers over the next week, and beyond if needed, but remained hopeful a lockdown extension wouldn’t be necessary.

“It’s early days, but these immediate relief measures will help many business owners cover some of the initial direct costs associated with the current lockdown,” he said.

“Ultimately any support measure will be welcomed, but we note that nothing will entirely offset the losses incurred by a seven-day lockdown, other than to be open for trade.

“The ultimate form of support for businesses is for the lockdown to be lifted as soon as it is safe to do so and we acknowledge the Premier’s (Steven Marshall) clear recognition of this need.”