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European Real Estate Research Quarterly

2020 August - 7 min read

In the midst of a pandemic, some European real estate sectors are thriving, and should emerge stronger in the end, while others are merely surviving. The Barings Real Estate team weighs in on the shifting opportunity set—and why the overall outlook remains positive.

Economy

  • A sharp GDP contraction is forecast for the second quarter of 2020, but a strong third quarter bounce back may already be in progress.
  • Improving medical data and the ongoing easing of lockdown restrictions will be key in dictating the recovery rate; a second wave of infections is a downside risk.
  • The rapid and coordinated fiscal and monetary policy response to the pandemic should help accelerate individual country recovery rates.
  • The European Union (EU) now has the ability to tap global bond markets, mutualise national debts, and thus address a systemic weakness in the Euro currency.
     

Property Markets

  • A sharp GDP contraction is forecast for the second quarter of 2020, but a strong third quarter bounce back may already be in progress.
  • Improving medical data and the ongoing easing of lockdown restrictions will be key in dictating the recovery rate; a second wave of infections is a downside risk.
  • The rapid and coordinated fiscal and monetary policy response to the pandemic should help accelerate individual country recovery rates.
  • The European Union (EU) now has the ability to tap global bond markets, mutualise national debts, and thus address a systemic weakness in the Euro currency.
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