Covid-19: short-term pain, long-term opportunities for European commercial real estate

Wednesday 17 June 2020

Over the past few weeks, most Western economies have remained frozen by the lockdown measures taken to contain the Covid-19 pandemic. These measures have already had an unprecedented economic impact, but the magnitude of the long-term fallout is difficult to assess at this stage. For real estate, we believe that the short- and long-term impacts have to be distinguished: cashflows (e.g., rents) are being hit in the short term, while in the long run some real estate markets’ pre-existing structural trends might accelerate...

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Vignette H2 2020 Investment Outlook

H2 2020 Investment Outlook - Investing during a de-freezing cycle

The Covid-19 crisis drove the global economy into an unprecedented deep freeze in the first half of 2020. The combination of monetary and fiscal stimulus will help the global economy de-freeze in H2. As was the case with the virus cycle, the recovery will be sequential and involve different regions at different times - on a ‘first in, first out’ basis - and will depend on the size of the policy response. As the global economy gradually de-freezes, investors will turn their focus back to geopolitics. The climax will be the US presidential election – the outcome of which appears increasingly open. It will influence the US vs. China dispute, which will shift from trade to technology and healthcare supremacy – and more broadly -- the new geopolitical order and the role of Europe within it. In Europe, we are monitoring the budgetary process and the recovery plan. This could redesign the future of Europe towards more sustainable and equal growth, the upcoming end of Merkel’s political era, Brexit and the response of the ECB to the German constitutional court, due in August.