Contrary to some report the real estate market has not fallen off a cliff because of the coronavirus crisis, experts agreed at Real Asset Media’s ‘COVID-19: Implications, Scenarios & Outlook for Real Estate’ briefing, the first to be held online with a panel of speakers and a live audience.
‘Unlike in Asia, investment volumes in Europe so far have not fallen back compared to 2019 or 2018 and notable deals are still being completed, despite the ongoing lockdown in the UK and in most other large European economies,’ said Tom Leahy, Director of Market Analysis, EMEA, Real Capital Analytics (RCA).
A number of deals that had been in the pipeline have been completed recently. For example, at the end of March a member of the Qatari royal family bought London’s famous Ritz Hotel for a reported £750-800 mln. In Paris, Aviva bought the Credit du Nord office from the tenant in a sale-and-leaseback deal, while Centrum bought a high street store in Munich’s prime shopping area for a rumoured €250 mln.
However, ‘it is likely the case that these and most other completed deals had been worked on well prior to this acute stage of the COVID-19 crisis,’ Leahy said. ‘It is only once the current pipeline of deals is complete that we’ll see the real impact on the market’.
There is no doubt that the number and value of European commercial property transactions in March will be low in comparison to recent years, he said, and the forecast is of a further slowing throughout April as the lockdowns remain in place, denting economic and financial activities.
RCA, which monitors the market on a daily basis, is already seeing evidence of this, Leahy said: ‘We saw 40 deals in the last ten days, which is way down on the normal rate. What we see is that the number of deals is falling day by day’.
Data show that the value of deals in Europe in the month of March was €13 bln, compared to €24 bln in the same month of 2019.