The companies faced with the coronavirus outbreak in Asia encouraged their employees to work from home, testing a system that has already been discussed for years. More and more companies on Tuesday talked with their employees and even decided to “send them home” since schools closed on Wednesday to contain the spread of the Covid-19 virus.
On the other hand, Romania has more than four million square meters of modern office space, most of which in Bucharest, concentrated in the Barbu Vacarescu and Dimitrie Pompeiu areas mainly. For instance, more than 8 million passengers passed through the Aurel Vlaicu subway station last year alone, according to the Bucharest subway operator Metrorex data.
“The number of those working in modern office buildings in Bucharest and in the four major regional centers in Romania (Cluj-Napoca, Timisoara, Iasi and Brasov) is probably higher than 400,000,” says Silviu Pop, head of the research with Colliers Romania.
“It is hard to say how many will be able to work from home because there are a lot of things that could be used as arguments against it, such as security reasons that can prevent companies from letting their employees work away from their work stations, such as banks, the physical impossibility of working remotely for those who do not have a company-issued laptop or for logistics reasons.”
A reasonable estimate, he added, is that maybe one in two or one in three employees working in modern office buildings could work from home.
On the other hand, consultants say that under the circumstances, such as pandemic, there are bigger uncertainties, especially when things change from hour to the next not just from one day to the next.
Beyond the operations of the companies renting space in modern office buildings, the malls and shopping centers could be affected, too, considering millions of Romanians go there during the cold season.
“Traffic in shopping centers has definitely dropped. The decline was visible in the first week since cases were found in Romania, in both shopping centers and restaurants; things returned to normal somewhat, but looking at the developments in other countries, it may be a temporary thing.”
On the other hand, retail could be less affected since online commerce could grow, as customers will prefer to order instead of going to the store themselves.
“There may be an increase in online orders of specific products such as perishable goods or household use products such as toothpaste, deodorant etc. Our opinion is that people will generally be cautious, will simply tighten the purse strings and will naturally curb spending on items they don’t necessarily need. Moreover, trends on the global financial markets suggest a rising risk of recession, which means we could be talking a decline in private consumer spending. We are not talking about a situation where tradition retail loses ground to online orders,” the consultant said.
Real estate deals are among the most affected at this time, as many developers are putting on hold plans to expand both in terms of land acquisitions and buildings.
“It is still too early to be able to gauge the impact; for instance, JPMorgan Chase bets on a V-shaped global economy recovery, that is after the abrupt decline in the first quarter to have a fast-paced occur in the second and third quarters. If things go like this, we will have “business as usual” in a few months for the real estate market, too. There are, however, serious risks things will not end like this, there may be a negative downward spiral on global markets, culminating in an overall decline in activity. If we go into recession, we will definitely be talking fewer investment deals, fewer rental deals, and so on and so forth.”
The hotel industry out of all sectors is the worst hit due to the postponement or cancellation of business trips and holidays.
The good news is the travel sector is not so big in Romania, accounting for only 3% of GDP compared with 13% in Italy.
“Travel, as the retail and services sectors in general, will see several slower months.”
(English version by Loredana Fratila-Cristescu)