Forecast: real estate market defies the corona crisis

Updated on September 21, 2020, 6:40 a.m.

Will the long rise in prices for houses and apartments end with Corona? Such expectations so far have been proven wrong. A new study also gives real estate buyers little hope of relief.

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Of the Immobilienboom in Germany, according to experts continue to defy the corona crisis. A large Part of the driver stay intact despite the pandemicAccording to a forecast by the Hamburg GEWOS Institute for Urban, Regional and Housing Research.

“These include the high demand for housing due to demographics, of the Lack of building land and objects such as the low interest rate coupled with a lack of investment alternatives in uncertain times. “The partly apocalyptic predictions in the lockdown would not have come true, said GEWOS expert Sebastian Wunsch.

Record year 2019 of the real estate market is exceeded this year as well

Specifically, GEWOS is forecasting an easy one this year increasing sales on the entire real estate market to a good 290 billion Euros (plus 0.5 percent). This would once again exceed the record year 2019. Responsible for this are primarily the income from residential real estate, which should climb by 5.2 percent to a good 215.5 billion euros. The Number of home, condominium, and apartment building purchases and building land on the other hand could decrease slightlyAccording to the paper available to the German Press Agency.

“Housing is a basic need and the demand for owner-occupied property in particular remains high,” said Wunsch. This was confirmed by data on price developments from the supply market and from expert committees on realized purchase prices during the year. There are also catch-up effects in transactions after a dip in the spring.

The corona crisis can hardly affect the price boom in apartments and houses

So far the Coronakrise the price boom in apartments and houses can hardly touch anything – despite a slump in the economy, rising unemployment and short-time working at a record level. In the second quarter, the price of residential properties rose by an average of 1.4 percent compared to the first quarter of the year, according to the Federal Statistical Office. According to the first estimate, there was an increase of 5.6 percent over the same period last year. In order to the increases were in the range of the previous quartersaccording to statisticians. Real estate prices had already risen sharply at the beginning of the year.

However could the corona pandemic according to GEWOS delayed on the Real estate market knock downthat usually lags behind the economy. “Should there be permanently lower demand for labor in Germany set, this would have an impact on the wage development and thus in the medium term also the demand for housing. “It is also questionable whether the pandemic and the lockdown changed living wishes permanently established – For example, for more space, more interest in owner-occupied residential property, living in the country or a higher priority for balconies or gardens. (mgb / dpa)

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the real estate market in Bologna after the Coronavirus

Coronavirus and the real estate market: the big question is the future of leases and sales given that many things have changed since the pandemic and it is unknown how long it will take to return to what we can define by convention as “normality”. Alberto Zanni he is the president of Confabitare Bologna and it is he who gives an overview of the situation and some predictions on the future between trends and needs changed due to the lockdown experience, the request / offer ratio and the consequences of tourist accommodation practically stopped given the few presences in the city compared to the boom of the past years.

Which real estate area is most in crisis at the moment? The commercial sector is the one that has suffered, suffers and will suffer most from the Covid-19 affair. We all know that unfortunately many businesses have not made it and have closed: there has been the problem of paying leases but also that of companies that do not reopen, leaving large empty and vacant properties. It is also difficult for anyone to decide to start a business now, when even before the pandemic there were shops that closed. It must be said that many owners, however, have facilitated tenants with reductions, also due to the effect of the law that favored the tax credit by deducting 60% from taxes. Among other things, this concession expired in August and we have already asked for an extension of at least 3/4 months. On the reductions of direct experience (starting from May) with a proportion of three out of four owners who have turned to us to lower rents. A beautiful message that differs from the image because the image of those who take tenants by the neck “.

Will the prices go down? The point about commercial, tourist, student rooms

As an effect of the post-pandemic crisis, are we witnessing and will we also see lower prices in the future? “Sticking to the example of commercial leases, a shop that used to be at 2,500 euros / month is now at 1,500. This gives a good idea of ​​the collapse of commercial leases and on this a dialogue has been opened with local administrations and with the Government to bring concrete proposals such as the return of the flat rate tax on rents, given that the taxes are quite high for these properties. Last week we were in Rome. We will see … Surely, in general, with the Covid effect the market real estate is changing and will change a lot.

Tourist rents have also collapsed. Just to give a picture of the situation and give some numbers: in 2017 there were 300 properties intended for holiday stays. They became 3,000 in 2018 and reached 4,000 apartments (not rooms, those are landlords ed) in 2019. Now they are all empty since the tourists have practically disappeared and there are neither fairs nor congresses. What will happen? That those 4 thousand will reduce the value of the leases.

Another issue is that of rooms intended for students or workers. 80% are still empty. The uncertainty is very strong. Probably many students who have discovered the efficiency of remote lessons will decide to stay close to their loved ones and save a lot of money. It is changing a lot and finding the bright side of it is very difficult. Things won’t be back to the way they were in 2019, and either way it won’t happen in less than a couple of years. There is likely to be a drop in prices here too. ”

“Post lockdown everyone wants a house with a terrace or garden”

How has Covid changed the needs of those looking for a home to rent or buy? “Since the post lockdown, when the real estate activities restarted, there have been many requests for houses with large terraces and gardens for private use, since we have been closed for a long time and the desire for open-air spaces has almost become a requirement. This trend concerns both the sale and the leasing and has shifted the interest also outside the historical center, towards for example via Emilia Levante / via Arno / viaGenova, but also the Murri area. The area of ​​via Saragozza is also very popular, being very green “.

Growing demand: terraces, balconies and private gardens. And prices are rising

In both cases (sale and rental), the most sought-after housing solutions will be those that can offer private terraces or gardens (even condominium if truly enjoyable). For the latter types of properties, price increases of up to 5-10% are expected, while rents are likely to be reduced by up to 20% for homes that will not be adapted to the new standards. Finally, the prices of “normal” housing in the city could suffer a decrease in prices of between 5 and 10% already in the first half of 2021, and then recover in the next 2 years.

Zanni, what do you tell us about second homes? Will the economic crisis see a massive sale to cut spending and recover liquidity or not? “Anyone who has a house in the Apennines or on the Riviera keeps it tight in light of what has happened in recent months. Many of those who do not have it want to buy it. I make a clarification about the sale and immediate liquidity. : beware of speculations, on which I know the bodies in charge will pay attention “.

A few numbers on Bologna

Even Bologna, like the rest of Italy, could not escape the fateful effects of Covid-19. In fact, our city, like all large cities, in the first half of 2020 saw a decrease in the number of sales by 6.4%. However, reading the data published by the Confabitare Real Estate Observatory (see table), it is clear that Bologna was the big city that best withstood the impact of the lockdown given that the average loss of sales suffered by other large cities was 15 , 8% and that is 2.5 times worse than the city of Bologna.

But there is little to rejoice because the mythical “Learned” is losing her greatest patrimony: the university students. In fact, the economic crisis that is gripping the “Bel Paese” is also affecting those families who had enrolled their children in our universities, as well as those students who served at tables in bars and restaurants in our city to pay for their studies.

The housing stock of Bologna compared with 2019

“In 2019, the housing stock of Bologna, made up of about 207,000 homes, saw 6,290 sales and almost 12,000 rentals that were placed on the market with the following types of contracts:

  1. 30% at the agreed fee
  2. 4% to students
  3. 57% free of charge
  4. 9% transient 1-3 years

If from 2015 to today the free rents had always grown (thanks also to the migration of the offer from the traditional rental to the B&B for tourists) today there is a good chance that the return to the traditional rental offer of many of the 3,500 properties destined for the market Tourism, combined with the desire to sell part of the assets destined for an increasingly uncertain market such as that of temporary leases, will undoubtedly contribute to the realignment of prices, with a particular impact on rents. In recent years, real estate players have made their way, investing in the construction of new student residences that will soon see the light and take away beds from the traditional market “.

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Small and medium-sized owners will have to work on energy classes

“It is certain that Bologna remains a fundamental node for traffic, railway and airport infrastructures, the fair, the mechanics and will soon return to shine also in the tourism segment, thanks to the ability of our entrepreneurs to innovate and adapt to the renewed needs of a clientele. increasingly demanding. And it is there that even small and medium-sized owners will be able and will have to work, trying to renovate their rooms and / or apartments for rent, through energy and aesthetic renovations, including the adaptation of furnishings and technological services (wireless, internet, climate, etc.) which must be in line with the standards of the new tenants “explains Zanni.

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Top 10 cities to sell a home: Colorado sweeps; New York and California are not listed

The state of Colorado has four cities as the best for selling a home.

Photo:
Kait Herzog / Unsplash

Many people might consider that states like New York and California, with their large and prolific cities, would be the leaders in all areas, but that statement is not entirely true. Those places, with their high cost of living and low affordability, are a long way from being number one in selling properties; not so for Colorado which, together with Arizona, has become the spearhead of sellers and real estate brokers.

According to a report by SmartAsset, where the 165 largest cities in the United States, they found which are the best to sell a house this year, placing Aurora as the best option to do so.

The methodology was based on five measurements: a five-year change in the median home value, the median number of days on the market, percent of homes sold with losses, closing costs, and interlocked real estate offices that exist for every 1,000 residents.

Top 10 US cities USA to sell a house, according to SmartAsset.

10.- GILBERT, ARIZONA

At this location there is an average closing cost of $ 3,436 and houses spend an average of 64 days on the market, the longest average number of days in this top ten.

9.- SEATTLE, WASHINGTON

Homes spend an average of 41 days in the market, where only 2.43% of homes are sold at a loss. The downside is that its average closing cost In the city it is $ 13,371, the highest on this list.

8.- PHOENIX, ARIZONA

Homes spend an average of 56 days on the market and have an average closing cost of $ 3,436.

7.- NORTH LAS VEGAS, NEVADA

During the last five years the average value of the house increased 50%. Not only that, the metropolitan area near the city of sin has the lowest percentage of homes sold for a loss of just 0.41%.

6.- DENVER, COLORADO

The capital is the first in the state to be on this list. Although Denver has one of the highest percentages of homes sold with a loss of 8.54%, the city also has the second highest number of real estate offices per 1,000 residents, allowing a quick sale.

5.- ARVADA, COLORADO

Further northeast of the same state, homes have increased in value by 43.6% between 2014 and 2018, selling on average for 52 days in the market.

4.- MESA, ARIZONA

Homes spend an average of 49 days on the market and closing costs are relatively low at $ 3,436.

3.- LAKEWOOD, COLORADO

Lakewood has the lowest average presence in the real estate market with 39 days. As if that were not enough, the city had a change of 37.7% in the average value of housing in the last five years.

2.- GLENDALE, ARIZONA

The average closing cost is $ 3,436, which is beneficial when your homes spend an average of 44 days.

1.- AURORA, COLORADO

Aurora, Colorado, was the most important city in the list of the best cities to sell a home. Homes in the city spend an average of 44 days on the market and the percentage of homes sold for city losses is quite low, at 2.21%. However, the average closing costs in Aurora were higher than Glendale, at $ 3,715.

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Why the Corona Crisis is an Opportunity for Proptechs

Cologne Successfully completing a round of financing seems increasingly difficult for start-ups in times of the corona crisis. Investors are holding back. Nevertheless, Kiwi, provider of digital locking systems, has ten million euros from its shareholders such as Arbonia and German living collected. Kiwi wants to use the money to grow and develop new products.

Like many other start-up scenes, the proptech industry is suffering from postponed financing rounds – liquidity is a critical issue for start-ups even without a crisis. But if one of the lessons from the shutdown is to digitize more in the future, this could give Proptech a new impetus.

The growing proptech scene shows how many founders see potential in the digital real estate industry, as startups in the real estate industry are called. In German-speaking countries, the investment company Blackprintpartners will have around 750 Proptechs in 2020, 72 more than in 2018.

Now they are facing a test: “Most proptechs are still in the early phase and burn money, they live from one round of financing to another,” explains Christian Schulz-Wulkow. The head of the real estate sector for Germany, Switzerland and Austria at the consulting firm EY is skeptical about the short-term development: “Corona will massively delay sales and new projects if they are not even at risk – but the costs for Proptechs will continue. Typical sales channels such as trade fairs and conferences are eliminated. ”

Schulz-Wulkow said that investors who invest in Proptechs would have other problems anyway. You would ask yourself: “Which of our investments should we write off? Which make losses, and which do we finance through? ”The upcoming consolidation process could therefore accelerate. Despite the pressure, there are Proptech segments that are benefiting from the crisis.

graphic

Digital transaction

Schulz-Wulkow describes proptechs who help people work more independently of locations as crisis winners: “After all, the world saw it, it has to and it can be worked from the home office.”
There is a lot of talk about digital solutions in real estate transactions.

A start-up that starts here is 21st Real Estate. With tools developed in-house, Proptech analyzes and evaluates locations, properties and portfolios. They also use digital help to forecast the development of rental and purchase prices.

Right now, smart data is an important basis for reliable, objective assessments and thus for risk minimization, says Nicolai Wendland, co-founder and IT manager, CIO, of 21st Real Estate. Hypothekenbank Berlin Hyp, which already started in 2018 as a strategic investor, is relying on its solution.

Document managers like Evana or Architrave could also benefit from the crisis. Both Proptechs offer the digitization of analog documents such as purchase and rental contracts, which are then organized and managed by artificial intelligence.

New access systems

Providers of digital access systems such as Kiwi are also hoping to gain momentum. The situation is similar at Nexenio. Among other things, Proptech offers interaction-free access control. Whether access to a building or part of a building is granted depends on two factors.

On the one hand, the user must have a device released for identification with them. Based on the sensors built into the smartphone, the software recognizes the typical movement pattern of the user, the second factor. So if someone wants to use another user’s smartphone as access, they will be denied access because they do not have the same movement pattern.

At the moment, the corona crisis is also restricting Nexenio, admits Christian Kregelin, who is responsible for business development at Proptech. So far, there have been no failures in the delivery of their system, but there have been delays of three to five months: “Since many offices have been closed, we cannot now implement our system on site.” In the long term, however, a positive development could follow: Nexenio is increasing the number of requests where its system should replace previous technology that works with fingerprints.

Communication systems

Communication between tenants and landlords could also increasingly shift to digital. The Proptech Animus has developed an app that allows residents of a district to communicate with each other, send complaints to the landlord or the caretaker, but also book package and laundry services.

The app, which is normally adapted to the wishes of the respective real estate operator, now offers Animus as an emergency solution, a less strongly individualized app. This is intended to facilitate neighborhood help, for example shopping for the elderly and risk groups, explains Carolin Ehrensberger from Animus.

Stefan Zanetti, founder of the Swiss start-up Allthings, also reports increased demand for his app: orders in April are three to four times higher than before. A marketing gimmick certainly helped: The Swiss temporarily provide interested customers with a light version of their app free of charge.

Corona may make some rounds of financing more difficult. The holding company Blackprintpartners, however, is optimistic: The changes provoked by the pandemic could give digitalization a decisive boost. Retained capital will be released after the crisis.

More: Financial investment – real estate crowdinvesting under scrutiny.

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Immofinanz appoints investor Pecik as the new head of the group

Logo of Immofinanz in Vienna

Due to the corona crisis, Immofinanz is currently not in discussions with its potential merger partner S Immo.


(Photo: Reuters)

Vienna The Austrian real estate company Immofinance gets a new CEO with the investor Ronny Pecik. Pecik will take over the chair for three years from May 4, Immofinanz announced on Thursday after the decision of the supervisory board. The executive chair was released after CEO Oliver Schumy prematurely vacated his chair in mid-March. A possible merger between Immofinanz and the rival S Immo could come closer because Pecik holds shares in both companies.

“Ronny Pecik is a leading entrepreneur and, due to his many years of experience in board and supervisory board positions, represents a particular strengthening of the board in challenging times like these,” said supervisory board chief Michael Knap. “In addition, due to his participation in Immofinanz, there is also a strong corporate responsibility,” added Knap.

Together with another investor, Pecik holds around 10.7 percent in Immofinanz. He also owns around 14.2 percent of the shares in S Immo. Between Immofinanz and S Immo there is a new attempt for a merger in the room. Due to the corona crisis, there are currently no talks, Immofinanz said recently.

More: The investor Petrus Advisers supports the merger of Immofinanz and S Immo.

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Vonovia is considering a new attempt to take over Deutsche Wohnen

Vonovia headquarters in Bochum

The housing group is continuously reviewing possible acquisitions from competitors.


(Photo: dpa)

Bochum The housing company Vonovia According to informed circles, is considering a new attempt at its competitors German living to take over. If a deal succeeds, a real estate giant valued at EUR 37 billion could emerge.

As can be heard, Vonovia is now working with consultants on a feasibility study for a friendly takeover that would have the blessings of both the German Housing Management and the Berlin Senate. According to the information, there are also potential tax hurdles to be overcome.

The plans attract attention, given that the German capital is a difficult market given the five-year rent cap. A decision by the Federal Constitutional Court on whether the rental cover violates the Basic Law is still pending.

A Vonovia bid for Deutsche Wohnen can only be expected when the situation regarding the corona crisis has eased, it said. The restrictions on public life in Germany are to be gradually relaxed this month and next.

Final decisions about a takeover have not yet been made, and it may also be that no bid is made.

Vonovia said on Thursday morning in an ad hoc announcement that acquisitions were “an integral part” of the company’s strategy and were “being continuously reviewed”. A transaction with Deutsche Wohnen would “only be realistic if fundamental questions were clarified and if they were supported by the will of the Berlin politicians, who are currently working flat out to deal with the corona crisis”.

Deutsche Wohnen could not be reached for an immediate comment. The Group’s market value is currently around EUR 12.7 billion. Vonovia is valued at around 24.3 billion euros.

A consolidation is taking place in the German real estate sector. Berlin-focused Ado Properties – market value of 1.7 billion euros – completed the acquisition of Adler Real Estate AG this month. Agreed in November Aroundtown the purchase of TLG Immobilien. Germany’s largest landlord of commercial real estate is being created with the share transaction worth EUR 3.1 billion.

More: Vonovia maintains profit targets despite corona crisis.

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How the corona crisis affects open-ended real estate funds

Erfurt Claus 2020 has big plans for 2020. The managing director of BNP Paribas REIM in Germany – the real estate investment arm of the French major bank – plans to launch an open real estate fund.

With this, the investment manager, whose real estate expertise in Germany has so far been reserved primarily for wealthy and institutional investors, also wants to enter the market for retail funds.

Or rather: wanted. According to the original plan, the fund should start selling at the beginning of April. But then Corona came and everything for Thomas’ plans was different than expected. “We have now postponed the start of our new mutual fund to June 2020,” he says.

The virus pandemic not only keeps the economy under control, but also the capital markets. If retailers and hoteliers today apply for deferral of rental payments to bridge their slump in sales as a result of the prescribed standstill, sooner or later investors in open-ended real estate funds will also be affected. Through the funds, they are indirectly the landlords of the industries concerned.

Corona crisis different from financial crisis

The situation brings back memories of the financial crisis, when real estate values ​​had to be corrected and funds closed because too many investors wanted their money at once. Experts also expect returns from the funds to decline as a result of Corona. Nevertheless, the situation today is different from that in the financial crisis.

At that time, the epicenter of the financial crisis was in the real estate sector. High-risk real estate loans failed, the nervousness spread rapidly to other real estate classes. In droves, investors withdrew funds from the open real estate funds.

graphic

Because they didn’t have enough liquidity buffers to earn all the claims, they were frozen. The funds bought time to monetize their properties. In general panic and under great time pressure, they sometimes made considerable losses, which ultimately also had to cope with the investors.

Today, there is no high-risk real estate loan at the beginning of the economic crisis, but a virus. “What we know from previous financial crises is that the spillover effects become more apparent the closer they are to the cause,” explains Steffen Sebastian, professor of real estate finance at the Ireb Real Estate Academy in Regensburg. However, the real estate is not in a crisis of confidence today.

In the corona crisis, retailers and hoteliers ask for rent deferrals because they are not allowed to open their shops and break down sales – and not because they have encountered problems due to a previously miserable business situation. For many companies, it is a stress test.

“Tenants from the hotel and retail sector have informed us that they want to negotiate their rental payments with us,” says Esteban de Lope, Managing Director of Deka Immobilien. The fund house is not alone in this. The other large providers from Commerz Real to DWS to Union Investment Real Estate also report on corresponding inquiries.

In the interests of investors

This puts the funds in a delicate position: On the one hand, they have an interest in keeping long-term leases – and thus secure income – in the funds and helping their tenants with a temporary solution.

On the other hand, they have to work for their customers, the investors. “We are committed to our investors and therefore do not grant flat-rate deferrals or rent reductions,” said a spokesman for Union Investment Real Estate. In plain language: deferrals remain individual decisions.

If rents are deferred, only the time of payment is postponed. They still have to be paid. But: “There could also be rent losses or rent adjustments here,” says Sonja Knorr, real estate fund analyst at the rating agency Scope.

The funds are also aware of the consequences: “Overall, it can be expected that the rental income of the funds will decline this year,” says de Lope from Deka. No fund manager can and does not yet estimate the extent of the decline.

graphic

Investors are not entitled to immediate notification of deferral or loss of rent: “There are no ad hoc notification requirements for open-ended real estate funds. If the fund defers rents or even loses rents, it does not have to notify it immediately. This is enough in the quarterly notifications to investors, ”explains Carola Rathke, partner at the business law firm Eversheds Sutherland in Germany.

Some providers already confirm revaluations. A spokesman for Commerz Real, for example, reports that in the first three months of this year objects dominated by retail were devalued by the experts.

But this also includes: The problems in the trade already existed before Corona, they have now been exacerbated by the crisis. At the same time, Commerz Real emphasizes: “At the moment, however, we are not seeing any significant effects on the management of our properties.” The provider calculates the fund’s return at 2.0 to 2.5 percent, roughly on the previous year’s level.

Loss of yield

Analysts remain more skeptical about the outlook. Rüdiger Sälzle, head of the fund analysis firm Fonds Consult, expects yields to fall by 50 to 100 basis points due to the corona crisis.

“On average, I expect a return of 1.5 to two percent,” says Sälzle. That was calculated conservatively, but manageable in view of the general conditions. The drop in rental income is likely to be felt initially, alongside property valuation and interest on liquidity, one of the return components of the funds. Where new contracts are due and the new rents are significantly lower than the previous ones, this will also lead to devaluations for real estate, says Sälzle.

The bottom line, from today’s perspective, returns remain in the positive range. This speaks in a market environment with highly volatile and sometimes sharply declining stock and bond markets for real estate. Morningstar analysts are already showing that European investors are drawing more capital from equity, bond and mixed funds than ever before.

graphic

There are still no official data for the real estate funds. Those of the BVI fund association for the first quarter will not be published until May. Scope analyst Knorr recognizes investment reluctance. “But we cannot see any waves of sales.”

The funds themselves report positive inflows in the first quarter. Commerz Real’s house investment has recorded inflows of 470 million euros since the beginning of the year. “The announcements of returns are still in the single-digit million range,” said a spokesman.

Union Investment Real Estate, whose funds UniImmo Germany and UniImmo Europe are among the largest open mutual funds, also reports on return claims in the single-digit million range. A spokesman for DWS says there are still positive net inflows – ie investments less return requests – and “generally no significantly increased return requests”.

Longer holding periods

In order to prevent a sudden, massive withdrawal of capital, which caused the funds to plummet during the financial crisis, stricter regulations apply anyway. Since 2013 it has been said that anyone who buys an open-ended real estate fund must hold it for at least two years.

Anyone wishing to redeem their shares can only do so with a notice period of one year. The illusion of a completely liquid trade in an illiquid product such as real estate was taken away from investors. Because when the going gets tough, the financial crisis showed, the funds have to sell their assets – and that is far more difficult than trading a stock package on the stock exchanges.

However, there is one exception for investors who bought their shares before 2013: they can withdraw up to EUR 30,000 from the fund every six months. “Today, however, the funds have sufficient liquidity to service these claims,” ​​says analyst Knorr, drawing attention to another difference to the financial crisis. The average liquidity ratio is 20 percent of the fund’s assets. 50 percent must be invested in real estate.

Debt financing is also more conservative today than in the financial crisis, says Knorr. Before the financial crisis, the average was 28.6 percent, today it is 15.1 percent. Some funds even had quotas of more than 40 percent.

With this credit lever, earnings could be increased in good times. This also applies reciprocally to the losses. “Today, a debt ratio of up to 30 percent is required by law. This is very conservative for real estate transactions, ”explains Knorr.

If funds fall below threshold values, for example that less than 50 percent of the fund’s assets are held in real estate, the capital management company must inform Bafin, who acts as the supervisory authority, explains Martina Sradj, partner of Eversheds Sutherland in Germany.

Private investors among themselves

Another stability factor: up to the financial crisis, semi-professional and institutional investors were invested in open real estate funds to a much greater extent than today. “Funds of funds or asset managers were very quick to return their shares at the time,” says Knorr. Today, these actors are not prohibited from investing in open-ended real estate funds. However, a wide range of alternative products has only developed for institutional investors in recent years, which is usually also cheaper.

The proportion of institutional investors in open-ended funds cannot be clearly quantified, but is significantly below the level of the financial crisis. Real estate funds of funds have disappeared from the market for private investors, explains Knorr.

The lawyer Rathke from Eversheds Sutherland adds: “Today, institutional and semi-professional investors are not directly prohibited from investing in open-ended real estate funds. However, there are strict requirements in terms of tax law, so that an investment in the open products is generally excluded. “

If people in countries like Germany, Austria or the USA are talking about relaxing the corona restrictions when shops are allowed to open again, then this should also make things easier for investors in open real estate funds. However, these measures are not a guarantee of a return to normalcy. This also applies to the real estate world. Sälzle, for example, points out the so-called second-round effects: “How the corona crisis will affect the real estate segment in the medium to long term is still completely open,” says the analyst. So the world is today in the “largest joint field trial in the home office”.

In the future, people will return to their normal jobs. But the office world doesn’t have to be the same. “The structure of the office space will change in the medium term. In the future, less space could be rented and employees could be given more flexibility in dealing with their home office, ”says Sälzle. What that means for the funds as a landlord is not yet clear.

Claus Thomas of BNP Paribas REIM, whose fund is due to launch this year, is not worried by this. He already has several objects in sight for sale, including a hotel in Munich. Although hotels in Corona are under particular pressure, he still assumes that use will develop above average in the long term, says Thomas. His fund should also focus on megatrends such as digitization and also invest in healthcare properties – two areas that could well benefit from the corona crisis.

More: Where investors can still find returns in times of the corona crisis

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IW expects housing prices to fall due to the corona crisis

Apartments in Berlin

According to the IW, housing prices could fall due to the corona crisis.


(Photo: dpa)

Frankfurt According to a study by the German Economic Institute, the prices for apartments in Germany could fall due to the corona crisis. “Based on possible bankruptcies and increased unemployment, future rent expectations should be reduced because households have less income overall,” wrote study author Michael Voigtländer.

“This could tend to have a negative impact on house prices.” Uncertainty is also growing, which is affecting purchase prices. The “Welt am Sonntag” had previously reported.

The more the economy slumps, the more prices are likely to fall. Sharply falling interest rates, in turn, slowed the price decline, IW real estate expert Voigtländer said on Monday. This would make real estate more attractive than other forms of investment.

Voigtländer expects interest rates to continue falling in the long term, as households are likely to save more for fear of the crisis and the relaxed monetary policy of the European Central Bank should further depress interest rates.

“The residential property market will come through the current crisis relatively well,” believes the economist. He expects prices to fall between zero and twelve percent this year.

However, there may be regional differences. With the often expensive real estate in southern Germany, there should be “more faults” because the car industry there is particularly badly affected by short-time work in the Corona crisis.

The demand for micro-apartments and luxury apartments is also likely to decrease, as they are often used by foreign specialists.

The IW hardly anticipates a decline in rents. Rents often stagnated in a crisis, as experience from earlier times showed. Owners would rather accept vacancy rates for apartments than lower rent.

More: The corona shock becomes a stress test for coworking.

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Karstadt owner Benko sells 17 properties to funds

Dusseldorf The Signa-Holding des Austrian investor René Benko sells 17 properties from the ailing chain of department stores Galeria Karstadt Kaufhof. The buyers are funds from the financial investor Apollo EPF.

According to the Bloomberg news agency, the purchase price is around 700 million euros. A Signa spokesman declined to comment on Friday. The transaction was already registered with the Federal Cartel Office for review at the end of March. The competition keepers have released the sale.

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Housing prices could drop by a quarter

Construction site in Berlin

In Berlin, apartment prices have only known one way in recent years: upwards. Corona could change that in the medium term.


(Photo: dpa)

Erfurt The corona crisis does not spare the real estate market either: Housing prices could drop by ten to 25 percent in the medium term, predicts the research institute Empirica. How strong the decline in purchase prices is depends on the development of the gross domestic product.

“The stronger and the longer the recession, the sharper the price effect. Since a recession is inevitable, this also applies to the development of purchase prices, ”write the real estate experts in their analysis.

The forecast slide is related to the economic crisis caused by the corona shutdown, but not only. The boom in the housing market has recently subsided anyway – a result that Empirica has already published in detail in the spring report of the property types. There the institute was responsible for the expertise on the housing market.

Empirica cites rising interest rates, a lower demographic need for additional housing, emergency sales, sluggish new construction and lower demand from investors, for example as a result of aborted transactions, as reasons for the expected “dip” in prices.

Since the beginning of the contact restrictions from March 16, the number of first real estate advertisements has plummeted. However, the experts found that rents and purchase prices were significantly higher than before, in Hamburg or Berlin the difference was over five percent.

However, this has to do with the fact that high-quality properties are now coming onto the market. With cheaper ones, the marketing effort now required is not worth it. For example, more and more landlords are also offering digital home visits.

Rents could only yield for a short period

According to the experts, the rents, unlike the purchase prices, will drop significantly less and only for a short period. Especially since the decline is not exclusively corona-related: New contract rents stagnated even before the virus crisis. Nevertheless, the question arises as to how high the purchasing power is still and what future rent potential still exists.

Nothing changes for tenants in existing contracts anyway. The Federal Government has extended protection against dismissal for those who can no longer pay rent due to corona due to short-time work or the loss of their job: They must not – as usual – be given notice if they are in arrears with more than two months’ rent. The rent may be deferred. This applies to rent debts between the beginning of April and – for the time being – the end of June.

If necessary, the period can be extended until the end of September. However, this does not remove the rental debt: it must be paid by the end of June 2022 at the latest.

Peter Ache, one of the authors of the real estate market report published annually by the expert committees, expects that the effects of the pandemic on the housing markets will be “rather weak”. Ache, who also heads the real estate division at the DVW association, suspects that some housing requirements are changing. This could flatten the trend of living in the city.

Incidentally, Empirica does not see the corona-related fall in prices as the start of an overall bursting property bubble. In the long term, prices will recover – provided the economy recovers in the coming year, as assumed by the real estate experts.

If this happens, conditions are similar to those before Corona: rising housing requirements, falling interest rates and a recovery in demand from investors. From the end of 2021, the market could stabilize and prices could rise slightly again.

More: The corona shock becomes a stress test for coworking.

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