Real Asset Insight #6 June 2020

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Insight & Strategy – GermanyResidential and logistics sectors toshow their resilience post-crisisHotel, retail and office sectors to bear the brunt of impact‘It is a greattime for equityrichplayersto dominateactivity in corelocations.’Marcus Lemli,Savills GermanyResidential and Logistics will prove to be themost resilient sectors as Germany dealswith the coronavirus crisis, experts have toldReal Asset Insight.‘Our research shows that the most negativeimpact of Covid-19 will be seen in the hotelsector and also in retail and some parts of theoffice market,’ says Matti Schenk, associateresearch, at Savills. ‘The good news is that someparts of the real estate market, notably logistics,residential and healthcare, will be resilient.’Investor and tenant demand for logistics isstrong and the sector has benefited from theincrease in e-commerce during the lockdown.And residential ‘is the most resilient asset class’,says Tobias Schultheiß, managing partner atBlackbird Real Estate.‘The operational part of the business is doingvery well, but the investment side is a differentstory, we have slowed down transactionalactivity,’ reports Rainer Nonnengässer, CEO ofInternational Campus.It is a only a temporary setback, he adds: ‘Shortstayand hospitality products will see a declineas people limit business travel, but micro-livingproducts will continue to be in demand. As forstudent housing, the inflows of foreign studentswill resume and there will be shortages of supply.I’m sure we’ll see strong inflows in the sector inthe next few months.’Flexibility will be the key word in the officesector post-crisis, says Marcus Lemli, chiefexecutive officer of Savills Germany and head ofinvestment Europe at Savills: ‘We are learning alot from the biggest home working experimentthat is going on at the moment. There willbe a need for social distancing in offices andwe already see tenants either reducing orreconfiguring space to make it more flexible.’MOBILE WORKFORCEMobility will be another key trend, as in futuremost people are likely to alternate betweenworking from home and holding meetingsin the office.‘The office market will change after the crisis,’says Schultheiß. ‘Home working will increase, butI don’t see a massive reduction in office space.People will still want to meet face to face.’As banks are cautious and foreign investorshave limited access to the market, Germany isnow a playground for domestic investors whodon’t need to worry about financing and whocan focus on the best assets in the mostresilient sectors.‘It is a great time for equity-rich players todominate activity in core locations,’ says Lemli.‘There are a lot of domestic players, pensionfunds, big institutions, insurance companies thatare very active. We’ve even seen prices increasedue to competition.’Working from home in Germanyis likely to become a key trendafter the Covid-19 crisisAdobe Stock/Girts40 Real Asset Insight | Issue 2 July 2020
We see things froma different angle......aiming to seewhat others don’tDelivering Alphaacross the cycle
Page 1: Real Asset Insight | Issue 2 | July
Page 4 and 5: INTRODUCTION6 Talking PointsThought
Page 6 and 7: Connectinga VirtualCommunityAs the
Page 8 and 9: Tenants willingto pay for ‘reliab
Page 10 and 11: Sharing unique insight, analysis, r
Page 12 and 13: Adobe Stock/rarrarorroEurope braces
Page 14 and 15: joint-issued European debt in the f
Page 16 and 17: In a post-Covid world will corporat
Page 18 and 19: EVENTS CALENDAR 2020Real Asset Live
Page 20 and 21: Crisis set to slow rental growth,bu
Page 22 and 23: Pandemic uncorks thee-commerce geni
Page 24 and 25: Insight & Strategy - E-commerce & l
Page 26 and 27: Strategy - GARBE Industrial Real Es
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Page 30 and 31: ‘The crisis has not changedItaly
Page 32 and 33: ‘The question isnot about whentou
Page 34 and 35: Getting back to businessAdobe Stock
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Page 38 and 39: Experts express confidence inGerman
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Page 44 and 45: Senior Housing andHealthcare Associ
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Page 54 and 55: Assisted living set to grow assecto
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Page 64 and 65: Insight & Strategy - European Debt
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