When a major crisis shakes everyday life and the financial markets, people feel much like hearing that pickpockets are on the go: they instinctively feel for their wallet to make sure it is still there. Everyone who owns assets is currently doing the same.
After all, the Germans seem to be certain of one type of property: real estate. 80 percent believe that this is still very stable in value, is the result of an online survey by the real estate crowdinvesting portal Exporo, for which 1,048 German citizens were surveyed.
Real estate investments were hit hard on the stock exchange alone. The prices of the large German real estate funds from the Sparkassen and Volksbanken, Deutsche and Commerzbank houses – they all fell by 10 to 20 percent within a few days in March, especially on the London Stock Exchange, where these fund shares are traded relatively briskly. In the meantime, however, the courses have made up for half to three quarters of their original fees.
Apparently, investors got liquidity here too to cover losses incurred elsewhere. Real estate may even seem more attractive in a # StayAtHome society than before. However, experts doubt that the real estate industry can get away with it. The prices of real assets will also come under pressure, at least in the short term, is certain Chris Urwin, who heads the research department for real assets at Aviva, the institutional investor. The current crisis has a particularly negative impact on retail, hotel and leisure properties.
The hotel sector is most affected, writes Matthias Pink, managing director of the real estate service provider Savills. The occupancy rate is declining significantly and an early recovery is unlikely. A certain catch-up effect is to be expected, but insolvencies can also be expected with a significant drop in sales and without state support.
The office property market is also always very sensitive to economic fluctuations, says Sven Carstensen, office property expert from the Bulwiengesa analysis institute. He expects vacancies to increase, albeit at a moderate level. Co-working providers and companies in industry crises will be hit hard.
The responsible department head Heike Piasecki even assesses the situation as negative for nursing homes. There could be a decline in occupancy in the short to medium term; Insolvencies of small operators cannot be ruled out in the medium term.
Housing and logistics at an advantage
But there are also areas that are less affected or can even benefit. Bulwiengesa believes that the crisis can reverse the trend towards ad hoc production and that storage space requirements increase. This benefits logistics properties. The immediate effects for residential real estate are rather small, as long as the recession is rather sharp and short. The fluctuation could even decrease.
In some German real estate segments, this will exacerbate negative developments that have already emerged. The area of project developments for retail and the hotel industry in the seven German A cities of Berlin, Hamburg, Munich, Frankfurt, Stuttgart, Dusseldorf and Cologne has already decreased significantly in the previous year. Above all, the construction of residential real estate is likely to decrease there, according to Bulwiengesa’s latest project developer study. But one should not conclude from this on the entire German housing market.