Concrete Analysis | Remote working increases the need for real estate risk management to counter cyberattacks, pandemic
- Property owners are advised to manage the total cost of risk and identify cost savings from a risk management perspective
- Better-informed risk-adjusted decisions can result in greater demand for resilient, well-managed buildings
As real estate adapts to immense change, it may be pertinent to look back at what has happened, to prepare ourselves for what may come.
Real estate owners today, grappling with falling revenues, are under intense pressure to contain costs and budgets have come under extra scrutiny. However, rather than an arbitrary implementation of cost containment plans, property owners are advised to manage the total cost of risk and identify cost savings from a risk management perspective.
Within risk management, resilience is a critical component in making a building, and companies, more functional and productive. Actions to improve building resilience makes economic and financial sense.
When Typhoon Mangkhut passed through our part of the region in 2018, it left behind US$3 billion in economic losses and US$900 million in insurable losses. Today, the economic impact on real estate from the current pandemic is also clear. More than 40 per cent of notified insurance claims due to Covid-19 have come from real estate, mainly from shopping malls and hotels.
The losses real estate has suffered from these events arises from both property damage and business interruption. As occupiers become more risk aware, greater focus will be placed not only on building attributes but also on property management. Moreover, how effectively a building is managed will certainly interest insurers.
