The real estate COVID downturn: why this time really is different

The COVID crisis has had a significant impact on European listed real estate. Although, the crisis continues, we can already observe that a few things are indeed different compared to the Global Financial Crisis (GFC).

First, the origin of the COVID crisis is not financial by nature but comes from a health threat. Unlike GFC, it necessitated the authorities to restrict the movement of people, effectively shutting down certain industries, and provide targeted financial assistance. A staggering $11 trillion of financial support has been deployed by G20 nations towards the COVID crisis, so far.

Second, the real estate industry has also changed. Since the GFC, listed real estate companies have decreased their leverage and become more resilient to liquidity shocks. Significantly lower interest rates are also supportive of liquidity position of real estate companies.

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