What Does Covid-19 Mean For The Real Estate Industry?

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Paul Tostevin   Contributor

Savills Monaco

Photo: Savills Monaco 

The disruption associated with Covid-19 is having a profound impact on global real estate markets. Overall, 67% of countries report a moderately negative market impact attributed directly to Covid-19, while 29% cite a severely negative impact.

At a sector level, healthcare, logistics and to a lesser extent institutional residential are currently the most resilient across occupier demand and investment activity. The surge in demand for online retail and the defensive benefits of investing in beds underpin these segments.

Retail, already undergoing a structural change, has seen its woes amplified by the virus. Hotels meanwhile have felt an immediate impact from the international travel restrictions and domestic lockdowns.

In the short term we expect to see capital values and rents follow the falls seen in transaction activity and occupier demand. Covid-19 remains a near term challenge, but certain trends, such as the shift to online retail and changing working habits may be accelerated. This could have long term implications for markets as a whole.

Source Savills research 
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Paul Tostevin   Contributor

Paul is the director of World Research at Savills.