RAI Coronavirus Special Report: vulnerable sectors

Today, we outline our editorial approach to how the coronavirus will impact various sectors and seek to identify the most vulnerable sectors and ask what the strategies are to minimise disruption. Please do get in touch with us to share your insights. Contact details below.

Logistics

Across Europe, supply chain disruption across Germany, France, Italy and Spain is expected to be most acute. We want to explore:

• Will supply chains be able to take the strain of the re-acceleration of e-commerce adoption due to concurrent homeworking across most of Europe? How can logistics operators respond to this unprecedented demand?
• At the same time, with so much of global supply chains funnelled through China, which has drastically slowed, how will inventory levels be maintained?
• What are the impacts on net absorption of logistics warehouses, will activity grind to a halt or will this spike in e-commerce demand force operators to take and reduce space as required?
• Is there viability of some warehouses and fulfilment centres being temporarily repurposed for UK and Continental European countries national strategic efforts to fight COVID-19? How would this work and what roles could these assets do in supporting host economy’s national interest?

Retail, leisure and hospitality

• The UK government measures to support these sectors have been bold and broad, but will it be enough to stave off redundancies? Will companies feel confident enough to take on more debt to support their cashflows at a time when profit visibility is undetectable?
• How have European national governments responded to support their sectors? Have the efforts by the ECB at the monetary union level been effectively co-ordinated with EU member states fiscal level?
• Is a further retail contraction inevitable? How do you see this working out in your market and sector? Will retail take the biggest hit of all vulnerable sectors?
• Will the hotel market be forced into contraction?

Residential

• Will the residential market could be relatively resilient? One the one hand transaction activity collapses, and sectors like student accommodation will come under stress as student return to their families and seek rental holidays, prompting institutional owners to clarify government support.
• How do you expect events to unfold and the impacts across residential? Will future residential demand be reshaped by the long-term economic effects of the pandemic?

Offices

• Office buildings across the UK and Europe are sitting empty indefinitely. Most firms have long-term lease contracts with landlords, which should mitigate the near-term direct effects on the rental office market. However, will occupiers exercise break clauses to downscale in anticipation of workforce reduction?
• There will be a significant demand and revenue impact on the flexible coworking office market. This is the coworking sector’s first great test: how will the sector cope under the seismic demand shock? Is a mixture of insolvencies, administration and consolidations inevitable?
• How do you see the impact across the who office market to compare to the global financial crisis of 2007-08 when the market was characterised by high levels of over-supply?

Real Asset Media is also preparing a series of video interviews and virtual briefing events focused around these topics, the first of which will be on the macro picture and speakers will be announced shortly.

RAM will donate every second advertising Euro to the Coronavirus Relief Fund. If you are interested in supporting the Real Asset Media special report with advertising please email: thorsten.herbert@realassetmedia.com
or frank.beinborn@realassetmedia.com;

If you would like to send through editorial commentary or research for the report, please email: james.wallace@realassetmedia.com.

If you would like to be part of our new video conference series or would like to contribute to our ongoing video interviews (conducted via Zoom), please email: richard.betts@realassetmedia.com