Why managers are donating space to help fight the coronavirus

As covid-19 continues to wreak havoc globally, a number of real estate managers are doing their part to tackle the pandemic by donating vacant space to strained healthcare systems in countries around the world.

Intensive care units at hospitals are coming under pressure as the number of covid-19 infections continues to climb. The crisis has thereby exposed shortages in the critical infrastructure needed to fight a pandemic. This includes not only hospital beds, but testing sites and storage facilities for medical supplies.

As the number of covid-19 cases increases around the world, finding additional space to accommodate the influx of patients is one of the main challenges hospitals are facing. The shortage in the UK is particularly acute: according to figures from the Organisation for Economic Co-operation and Development compiled on March 17, the country had just 2.5 beds per 1,000 inhabitants, compared with Germany’s eight, France’s six and Italy’s 3.2.

In response to this growing need, some property management firms have stepped up to address the shortage. Fiera Real Estate is one such manager. Together with its development partner Angle Property, the Canadian property firm made its Headley Court property in Surrey, England available to the UK’s National Health Service to be used as a temporary hospital during the pandemic from May 4, with space for up to 300 beds.

Headley Court, a former military rehabilitation center, was acquired by two funds managed by Fiera in May 2019. The property is being donated while Fiera and Angle await planning approval to convert it into a mixed-use asset comprising homes and care facilities.

Fiera’s chief executive UK Alex Price says the 350,000-square-foot space was provided to the NHS on a no-cost, rent-free basis for six months, and that the agreement is open to revision depending on the NHS’s needs beyond November.

Price says the social impact Fiera and Angle could have was its primary consideration in donating the space. “What Fiera and Angle have done at Headley Court sits at the heart of our views on supporting communities across the UK,” he says. “In the short term we have addressed a social need by providing 300 extra beds to the NHS, but I hope we are also making a statement about our views on the need to give back to society in the longer term.”

The New York-based mega-manager Blackstone, through its UK live events business NEC Group, offered up its exhibition venue in Birmingham to the NHS as a dedicated 500-bed field hospital for covid-19 patients. The venue will now serve as the site of the NHS Nightingale Hospital Birmingham, which will take coronavirus patients who may no longer need intensive care from 23 Midlands hospitals. This will free up capacity at the hospitals and enable them to focus on caring for covid-19 patients in need of intensive care. It was given to the NHS rent-free for as long as required from April 10.

Lionel Assant, Blackstone head of European private equity, says: “Like the rest of the [UK] we want to help in any way we can during this crisis, including putting the entire NEC facility at the disposal of the NHS for as long as it needs it.”

Testing sites and free parking

Not all of the vacant space donated by real estate managers is designated for hospital use. Some managers have offered parking facilities to healthcare systems for other covid-related purposes.

London-based real estate manager Nuveen has given NHS staff partial or full access to spaces at its Bullring shopping center in Birmingham and a parking garage in east London, free of charge.

“We believed that there might be additional staffing needs in the short term that would increase the number of NHS workers needing somewhere to park,” says Abigail Dean, head of sustainability at Nuveen Real Estate. She adds that the parking spots would be available to the NHS for as long as the lockdown lasts in the country, but that the donations would be re-evaluated once the lockdown has been lifted.

Brookfield, the Toronto-based alternative asset manager, also donated some of its parking lots close to hospitals and medical centers in London for use on an indefinite basis by NHS workers.

In the US, some managers are donating parking spaces for use as covid-19 testing sites. The Chicago-based manager Harrison Street has repurposed the parking lots at some of its medical facilities for drive-through testing. It also has offered medical office space to treat non-covid patients from hospitals facing an influx of coronavirus cases.

In a statement on Harrison Street’s website, Christopher Merrill, the firm’s co-founder, chairman and CEO, remarks: “Our team has been able to fast-track access to vacant suites within our medical office portfolio to help alleviate the strains on existing space and generate the additional surge capacity necessary to combat covid-19.”

Medical supply storage

Other managers have donated space to address the surging demand from healthcare systems for medical supplies and equipment.

Nuveen offered a unit on its multi-let industrial estate in Luton, town to the north of London, to the local council to house supplies for a nearby NHS hospital.

Dean believes the crisis will bring a renewed spotlight on social responsibility. “The real estate industry has been very much focused on environmental responsibility,” she says. “But now we are seeing a wave of managers thinking: ‘what is our social role and what should we be doing?’ We have a clear corporate social responsibility.”

Over in China, GLP opened 110 of its logistics parks, located in 40 cities across the country, for the storage and transfer of healthcare equipment such as air purifiers, ventilators and protective masks. The equipment, which took up 20 million square feet of storage space, was later donated to hospitals in the city of Wuhan through charitable foundations.

Teresa Zhuge, executive vice chairman of GLP China, recalls: “While we were discussing what we can do to help the relief efforts, apart from donating the protection masks and gear needed by the hospitals, [GLP co-founder and CEO] Ming Mei also pointed out that short-term needs would arise for more spaces to store and distribute supplies needed in the national efforts combating the virus.”

She adds that GLP’s relief efforts were bolstered by having the largest industrial warehouse footprint in China: “Our size and reach enabled us to be in the best position to quickly stand up and help the communities that need it most.”

Many private real estate insiders have noted that managers will be remembered for their actions during the pandemic, a point that has not gone unheeded by GLP. “There is always opportunity during a crisis to be a leader,” says Zhuge. “So I think our response to this one will have an impact on our perception.”