Unanswered questions make 2021 a tough market to call

Berlin Hyp’s head of real estate finance Benelux Rogier Bos stated that 2021’s big question is, when will the pandemic crisis turn into the economic crisis? He believes that the answer is linked to when state support stops.

Berlin Hyp focused on the residential and supermarket sectors before the crisis, a decision whose wisdom has been borne out by events as these are the sectors that have remained stable over the last 10 months.

However, talking to Real Asset Insight’s Richard Betts, Bos said that the office market is currently interesting because it is so difficult to see what will happen. While many office workers continue to work from home, Bos believes that their preference is to return to the office.

Referring to the retail property markets, Bos said that he believes that city centres will definitely survive. “The only question is, at what rent level,” he added.

Bos said that retail concepts that combine physical and online shopping are the ones that produce most profit and have the best outlook. But, since profit is not generated in physical shops, how much rent will retailers be prepared to pay?

And, while the logistics market is thriving, he questions some of the low yields that prevail in this sector. “When there is a large gap between construction cost and value, there is very often a bubble,” he said.

Click on the video above to watch the full interview or listen to the podcast below.