Since the onset of the Corona the epidemic of real estate owners and those interested in buying a property puzzles about how the crisis moved prices. Now, the Scope rating Agency, gives a first indication. It has upgraded the Ratings of the open-ended real estate public Fund.
result: mainly because of the higher risks and lower earnings prospects in various real estate segments – notably retail and the Hotel – were downgraded a dozen funds down. Three funds were able to maintain their Rating. The rated funds manage a total of around 100 billion euros.
Scope is the mass want to know the downgrade will not as a General warning, understood: in Spite of the downgrades, the Ratings are still on a comparatively high level, write the analysts. The average Rating of the Fund is located at “a” – what makes from the investors ‘ point of view, a good risk-adjusted return.
financial crisis ten years ago has had devastating consequences
In the financial crisis of 2008/09 had to be closed 18 open-ended real estate Fund with assets of about 26 billion euros for liquidity reasons, and later settled. Such a Situation is not currently in sight. The funds have sufficient cash and cash equivalents, from an average of just under 20 percent of the Fund’s assets.
And on the other, there was since the outbreak of the Covid-19-crisis there were no exceptional cash outflows (as of the end of may). Across all funds, the net cash inflows add up in the first quarter by 2020 to around four billion euros.
Nevertheless, the Covid-19 triggered the economic crisis of the individual real estate segments meets force with. While the food retail sector is one of the few crisis-winners, suffering from the stationary retail trade, particularly in the textile area. The structural change to E-Commerce is accelerating and will lead, in the view of the Scope of a further decline in demand for Space and lower Rent. You want to invest? The experts from the Bernecker exchange-compass help you in your investment. (Partner offer), Free of charge, the recommendations of the Bernecker exchange-compass test! (Partner offer)
In the spotlight: hotel and office real estate
The Hotel and tourism industry was due to the government Shutdown measures a massive hit. However, the associated losses are not expected to be permanent. No later than 2022 Scope expected in this area as a normalization. The Covid-19-crisis will affect the office real estate market negative. Reasons for a possible staff reduction in the Wake of the recession and is expected to also an increased Trend for Home-Office
the Bottom line remained the open-ended real estate Fund in the Covid-19-crisis in the first quarter was stable. Whereas other segments suffered in March of this year, partly drastic losses, the average Performance of open-ended real estate Fund positive.
annual return of the Fund falls
For the full year, 2020 is expected to Scope, Fund yields between 1.5 and 2 percent. However, this is below the rate of return of 3.1 per cent in the past year. The main reason for the lower return expectations in this year: a number of tenants, especially in retail stores – aim follow-up negotiations and rent reductions. This has a direct impact on the revenue of the Fund and in the long run, on the valuation of objects.
The cautious assessment of the Fund’s experts, is consistent with the findings of the brokers. Kai Enders, member of the Board of Engel & Völkers, estimates the Situation as follows: “The Corona pandemic leads in the short term, the relocation of Transactions, in the long term, it will not reduce the demand for Housing but. The reason: For many years, the demand for housing in many cities and regions beyond the scarce supply of real estate. The reasons for the high demand were to persist.
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*The contribution “is Not immune against the crisis: analysts levels of open-ended funds mass down” is published by the stock exchange on Sunday. Contact with the executives here.
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