Real Estate

Can Residential Fill the Retail Investment Gap?

May 2021 – 8 min read
Property investors and their lenders are shifting down the risk curve and becoming highly selective about sector exposures and asset quality. The Barings Real Estate team weighs in on how these trends will drive opportunities through 2021 and beyond.


  • In the wake of the COVID-19 pandemic, we expect Europe’s economic recovery to be varied, primarily reflecting the vaccination pace but also economic exposures. For example, those countries with a reliance on tourism remain vulnerable to on-going travel restrictions, while the more manufacturing orientated, especially with a high level of digital readiness, are likely to rebound sooner.
  • Highly accommodative monetary policy and fiscal stimulus will help to sustain the recovery, with additional support from the European Recovery Fund for those countries hit hardest by the pandemic.

Property Markets

  • The pandemic has benefited the industrial sector through a lockdown initiated e-commerce boost, and the residential sector through large scale economic support programs. These sectors were already in a strong structural position pre-COVID.
  • Uncertainty exists in the office sector, but we are now seeing corporates backtrack from plans to slash footprints, even before workers return to the office. For retail, extended lockdowns/restrictions have intensified pre-COVID structural challenges. 
  • Property investors and their lenders are shifting down the risk curve and becoming highly selective about property sector exposures and asset quality. It will likely be these trends that will drive sector-pricing prospects through 2021 and beyond.

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Paul Stewart

Head of Europe & Asia Pacific Real Estate Research & Strategy

Benjamin Thatcher

Associate Director

Joanne Warren

Director, Real Estate Research

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