Real Estate

European Real Estate Research Quarterly

November 2020 – 8 min read
While COVID has negatively impacted the retail and hotel sectors, the logistics and residential sectors have been much less affected. The Barings Real Estate team weighs in on the opportunity set—and why the overall outlook remains positive.


  • While Q3 GDP rapidly rebounded, rising infections mean restrictions on activity are tightening again, pushing the economic recovery backward. 
  • Despite ultra-accommodative monetary and fiscal policy responses, the strength of COVID’s impact on demand means prices and thus interest rate expectations should remain anchored for the foreseeable future. 
  • The IMF are now encouraging governments, which have access to capital markets, to ramp up public spending and support to limit permanent economic scarring.

Property Markets

  • COVID has cyclically weakened all of the major real estate sectors but to varying degrees. Retail and hotels are most negatively impacted, whereas the logistics and residential sectors, where longer-term structural trends are more supportive, have been much less affected. 
  • Low rates are a huge support for core pricing, but only where the structural drivers (demographics and technology) are favorable. 
  • Investor and lender uncertainty is currently greatest around the outlook for offices. Reduced corporate office footprints look likely, but an occupier flight to quality will occur during the recovery—initially driven by fears and health and safety concerns, then to maximize productivity benefits, of the already in chronic short supply, top quality offices. This will be a significant opportunity for value add investors.

Want to read the full article?

View PDF

Paul Stewart

Head of Europe & Asia Pacific Real Estate Research & Strategy

Benjamin Thatcher

Associate Director

Joanne Warren

Director, Real Estate Research

Any forecasts in this material are based upon Barings opinion of the market at the date of preparation and are subject to change without notice, dependent upon many factors. Any prediction, projection or forecast is not necessarily indicative of the future or likely performance. Investment involves risk. The value of any investments and any income generated may go down as well as up and is not guaranteed by Barings or any other person. PAST PERFORMANCE IS NOT NECESSARILY INDICATIVE OF FUTURE RESULTS.

Any investment results, portfolio compositions and or examples set forth in this material are provided for illustrative purposes only and are not indicative of any future investment results, future portfolio composition or investments. The composition, size of, and risks associated with an investment may differ substantially from any examples set forth in this material No representation is made that an investment will be profitable or will not incur losses. Where appropriate, changes in the currency exchange rates may affect the value of investments. Prospective investors should read the offering documents, if applicable, for the details and specific risk factors of any Fund/Strategy discussed in this material.

Barings is the brand name for the worldwide asset management and associated businesses of Barings LLC and its global affiliates. Barings Securities LLC, Barings (U.K.) Limited, Barings Global Advisers Limited, Barings Australia Pty Ltd, Barings Japan Limited, Baring Asset Management Limited, Baring International Investment Limited, Baring Fund Managers Limited, Baring International Fund Managers (Ireland) Limited, Baring Asset Management (Asia) Limited, Baring SICE (Taiwan) Limited, Baring Asset Management Switzerland Sarl, and Baring Asset Management Korea Limited each are affiliated financial service companies owned by Barings LLC (each, individually, an “Affiliate”).

NO OFFER: The material is for informational purposes only and is not an offer or solicitation for the purchase or sale of any financial instrument or service in any jurisdiction. The material herein was prepared without any consideration of the investment objectives, financial situation or particular needs of anyone who may receive it. This material is not, and must not be treated as, investment advice, an investment recommendation, investment research, or a recommendation about the suitability or appropriateness of any security, commodity, investment, or particular investment strategy, and must not be construed as a projection or prediction.

Unless otherwise mentioned, the views contained in this material are those of Barings. These views are made in good faith in relation to the facts known at the time of preparation and are subject to change without notice. Individual portfolio management teams may hold different views than the views expressed herein and may make different investment decisions for different clients. Parts of this material may be based on information received from sources we believe to be reliable. Although every effort is taken to ensure that the information contained in this material is accurate, Barings makes no representation or warranty, express or implied, regarding the accuracy, completeness or adequacy of the information.

Any service, security, investment or product outlined in this material may not be suitable for a prospective investor or available in their jurisdiction. Copyright in this material is owned by Barings. Information in this material may be used for your own personal use, but may not be altered, reproduced or distributed without Barings’ consent.