Wishing you all a happy Easter weekend

The whole team at Real Asset Media wishes you all a safe and happy break over the Easter weekend.


The whole team at Real Asset Media wishes you all a safe and happy break over the Easter weekend. We will take a break on Monday and then return on Tuesday with more of your insight and thought leadership. We hope you keep safe and well as we all try to support the efforts of governments around the world. Stay safe, stay home but stay connected and stay positive.

‘The crisis will bring some long-term changes’

Kim Politzer, Director, Head of Research, European Real Estate, Fidelity International

Kim Politzer, Director, Head of Research, European Real Estate, Fidelity International

Kim Politzer, Director, Head of Research, European Real Estate, Fidelity International, tells The Real Asset Day logistics has strengthened its position as an asset class to invest in despite supply chain management issues, while there won’t be the permanent significant shift to online shopping that some expected and in future more people will work from home for at least some of the time


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‘Investors are cautious but still doing business’

Curth C Flatow, Founder, FAP Finance

Curth C Flatow, Founder, FAP Finance

Curth C Flatow, Founder, FAP Finance, tells The Real Asset Day that many institutions see alternative investments in debt funds rather than equities as a market buffer, so they continue to raise capital for the funds but have stepped up the due diligence process to assess specific risks


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Asia Experience

Kim Politzer, Director, Head of Research, European Real Estate, Fidelity International

Kim Politzer, Director, Head of Research, European Real Estate, Fidelity International

Kim Politzer, Director, Head of Research, European Real Estate, Fidelity International, tells The Real Asset Day that there are parallels with the liquidity crisis of the GFC, and with the supply and demand recession of 1992, but the fact is that there has not been such a disruptive shutdown of the economy before, so it is important to look at how Asia has reacted to the pandemic and learn some lessons


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‘Investors are cautious but still doing business’

Curth C Flatow, Founder, FAP Finance

Curth C Flatow, Founder, FAP Finance

Curth C Flatow, Founder, FAP Finance, tells The Real Asset Day that many institutions see alternative investments in debt funds rather than equities as a market buffer, so they continue to raise capital for the funds but have stepped up the due diligence process to assess specific risks


Contact the editor here: mail

Event: ‘Hoping for a rebound in 2021’

There is no doubt that Q2 will be tough, and that at present it is hard to judge what the speed of the recovery is likely to be.

It is important to keep positive during the current crisis and focus on the good fundamentals that will underpin the recovery, delegates heard at Real Asset Media’s ‘COVID-19: Implications, Scenarios & Outlook for Real Estate’ briefing this week, the first event to be held online with a panel of speakers and a live audience.

‘If we could get to a gradual normalisation from June, that would allow us to get to a rebound in 2021, which would be a great result,’ said Herman Kok, Head of Research, Meyer Bergman. ‘We can then learn from how we dealt with this crisis’.

There is no doubt that Q2 will be tough, and that at present it is hard to judge what the speed of the recovery is likely to be.

‘We are likely to have the biggest fall in GDP since the Second World War, but things will get back to normal,’ said Andrew Burrell, Chief Property Economist, Capital Economics. 

The return to normality is likely to be a slow and gradual process rather than a sudden event. But even in the depth of the crisis it is worth not losing sight of the positives. 

One is that the current crisis cannot be compared to the GFC because the fundamentals are very different, said Hans Vrensen, European Head of  Research & Strategy, AEW Europe: ‘We don’t have a large amount of space coming through at the wrong time, unlike previously, and this is a saving grace. Also in 2008 there was a lot of leverage in our industry, but we have learnt our lessons and the sector is now in a better position to withstand a valuation shock’. 

Some deals are still highly leveraged, but in general the European market is in a strong position and will be resilient.

‘It is too early to be optimistic but we see positive thinking from our clients, who see the long-term value,’ Vrensen said. ‘We have a large amount of capital still committed to real estate. Having that commitment from our clients means we can find good opportunities with the re-pricing of assets’. 

There are concerns about the denominator effect, as stock market falls have artificially pushed up allocations to real estate, with some indications of an eagerness to sell. In Europe, however, unlike the US, target allocations to real estate have not been met by most institutional investors. 

‘Material uncertainty clauses have forced redemptions, rather than clients wanting to get out,’ said Kim Politzer, Director, Head of Research, European Real Estate, Fidelity International. ‘The current situation is temporary, and real estate remains a liquid asset class’.  

Collaborative approach is key for owners and tenants

Kim Politzer, Director, Head of Research, European Real Estate, Fidelity International

Kim Politzer, Director, Head of Research, European Real Estate, Fidelity International

Kim Politzer, Director, Head of Research, European Real Estate, Fidelity International, tells The Real Asset Day that the crisis has shown the importance of a collaborative rather than confrontational relationship between owners and tenants, as both are facing difficulties. However, the demand for rent holidays presents a real challenge to the real estate investment business because collecting rent is the raison d’etre for investing


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Event: ‘The shift to online will be permanent’

The coronavirus crisis is having a particularly negative impact on the retail sector, but it could also accelerate much-needed change

The coronavirus crisis is having a particularly negative impact on the retail sector, but it could also accelerate much-needed change, delegates heard 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.

‘Retail has been hard-hit, but if the sector gets fully re-priced, then that’s an opportunity to invest in it again, accessing it a proper level,’ said Kim Politzer, Director, Head of Research, European Real Estate, Fidelity International. ‘We have been concerned about the slow progress in re-pricing retail’.

The retail sector could emerge from the coronavirus emergency in very different shape, leaner but also more attractive to investors. 

‘We still have too many retailers and too many locations that shouldn’t be there and should be re-purposed,’ said Herman Kok, Head of Research, Meyer Bergman. ‘The crisis will accelerate the re-pricing and the restructuring of the retail sector’.

Another change precipitated by the forced shutdown of shops and department stores is in the relationship between landlord and tenant.

‘Tenants are struggling as their businesses are being put on hold,’ said Kevin Turpin, Regional Director of Research, CEE, Colliers International. ‘We’re encouraging communication and cooperation between landlords and occupiers, because sensible compromises are needed rather than legal routes’.

But in fraught situations like the current one cooperation can be difficult to achieve.

‘There is a conflict between opposing needs and some landlords are taking legal action against their tenants who haven’t paid the rent,’ said Tom Leahy, Director of Market Analysis, EMEA, Real Capital Analytics. ‘It would be great to have a collaborative process, but the situation is so serious that it has become a battle for survival’.

The relationship has to be salvaged for the future, because the crisis will end and things will return to normal, said Kok. 

Some changes the crisis has brought about will alter the outlook for retail, for logistics and indeed for society in general over the long-term, Kok said: ‘The emergency has shown that physical presence can be replaced by an online presence. The shift to online will be permanent’.

Asia Experience

Kim Politzer, Director, Head of Research, European Real Estate, Fidelity International

Kim Politzer, Director, Head of Research, European Real Estate, Fidelity International

Kim Politzer, Director, Head of Research, European Real Estate, Fidelity International, tells The Real Asset Day that there are parallels with the liquidity crisis of the GFC, and with the supply and demand recession of 1992, but the fact is that there has not been such a disruptive shutdown of the economy before, so it is important to look at how Asia has reacted to the pandemic and learn some lessons


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Event: ‘Capital flows will take a hit’

The immediate impact of the health crisis will be a sharp drop in transactions, but markets players must look beyond the short-term

The immediate impact of the health crisis will be a sharp drop in transactions, but markets players must look beyond the short-term, experts agreed at Real Asset Media’s ‘COVID-19: Implications, Scenarios & Outlook for Real Estate’ briefing this week, the first event to be held online with a panel of speakers and a live audience.

‘Volumes will slow substantially in the period ahead, especially if the restrictions on movement last for another 6 months as some say,’ said Tom Leahy, Director of Market Analysis, EMEA, Real Capital Analytics (RCA). ‘Around 50% of deals in Europe involve a cross-border player, so the restrictions will inevitably have a negative impact’.

RCA’s prediction is that international capital moving into Europe will slow sharply, not just from China but from Singapore and South Korea as well. Gulf money is unlikely to come to the rescue this time, Leahy said, because there is a correlation between outflows from the region and the oil price. The recent plunge in the price of oil is likely to dent any appetite for investments in Europe in the near future. 

Looking at how the situation is evolving in China, which was the first to be hit by coronavirus, can give some idea of what to expect in Europe. 

According to RCA data, in the first two months of the year deal investment volumes in China fell by 50 per cent. ‘This is the order of magnitude we are likely to see in other markets,’ said Andrew Burrell, Chief Property Economist, Capital Economics, and at this stage it is difficult to predict how quickly the economy and the real estate market will respond. 

The picture that is emerging so far from Asia-Pacific is not positive, said Kim Politzer, Director, Head of Research, European Real Estate, Fidelity International: ‘We see a quick ramp-up in businesses opening but there is not enough work for them to do, so there is a double dip happening. We need to realize the extent of disruption in the system’.

As offices open again in China things are not quite returning to normal yet. ‘There are positive signs on the supply chain side, but order books are reduced,’ said Kevin Turpin, Regional Director of Research, CEE, Colliers International. ‘Ongoing deals are happening, but new ones are being called off and we have seen a price shift starting to come through. It is still early days, but things are shifting’.