Catella Research presents a report on COVID-19 implications on the European Real Estate Markets.
Looking at many sectors, the global economy is currently breaking down into three main status quo elements:
- There are industries that have been directly and massively affected by the operational events of the last 3 months - these include, for example, personal services in the consumer goods industry, the entertainment industry or the aviation industry.
- There are also brownfields which directly benefit greatly from the market distortions. Examples are the IT sector, the manufacturers of health products or parts of the logistics value chains.
- And there are industries which are currently in a holding pattern. ¬These include the real estate sector or the engineering sector.
What the latter industries have in common is that there is currently no evidence of a price change based on market activities. But at the same time, it is obvious to many that the deepest global recession since the end of the Second World War will of course leave its mark. At least if you look in the rear-view mirror. Especially the real estate industry, coming from a nearly 10-year upswing phase, seems to be rather indifferent about the fundamental effects of COVID-19.
But how strongly will the individual segments really be affected? Even more: in the investment universe of multi-asset companies, real estate traditionally plays the "stabilizing" role. So how do market participants behave when the other asset classes are more volatile?
Catella Research is aware of the fact that there is hardly a less favourable time to make a forecast for the real estate markets that is not influenced by daily news "from the economy". But we also see it as our task to provide you with a framework for how we assess the current situation.