Higher build costs and longer construction periods pose a potential headwind for profits. But in select markets, developers have the ability to charge a premium rent and potentially exceed required returns.
With vaccinations reducing hospitalization rates, lockdown restrictions are easing and Europe’s economies are re-opening. High-frequency survey data is robust for both services and manufacturing sectors, indicating a broad-based recovery. In the immediate term, the pace of vaccinations—in particular, second doses—and new cases versus hospitalizations will be key to assessing the immediate risks around the recovery.
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