Despite the volatility of the markets, real estate remains one of the most attractive investments during times of low-interest rates. The pandemic has affected millions of people and accelerated structural changes in three core sectors of the real estate industry.
Due to the uncertainty, many assets that were previously considered uneconomic have been repositioned and are now being actively managed by market participants. Data centers, life sciences buildings, and industrial property are some of the beneficiaries of the steady demand for logistics and housing.
This requires a deeper understanding of the various types of assets that can be derived from various demand shifts and emerging asset classes. Market conditions can create uncertainty and make it difficult for individuals to make the right decisions this coming 2022.
There are many surveys that reveal a significant amount of pent up capital. These reports also reveal an emerging bias towards domestic stocks as investors rely on more experienced local experts when dealing with travel restrictions. Amplifying this domestic focus is the expectation that we will see a robust recovery within domestic markets, with ample opportunities for investors to take advantage of.
Germany’s ability to maintain its stability has also helped it gain favor in the global rankings. This is possible due to its great ability to deal with the crisis. Surveys also reveal a growing interest in addressing social, environmental, and governance concerns. These topics are becoming increasingly important as we re-evaluate how real estate fits into society.
The pandemic has also reinforced the importance of addressing the environment’s carbon emissions. Many industry leaders are now thinking about how they can reduce their carbon footprints.
There’s so much capital but put on hold
Despite the global financial crisis, capital remains plentiful. This year’s survey showed that pent-up capital was raised before the pandemic and still needs to be deployed. Although the low interest rate sector is supporting asset values and fuel demand, it has created a sense of suspended animation, according to the findings of a study conducted in July and August last year.
The first is the pandemic, which has put economies on hold. It has raised concerns about when normality might return and how it will look once it does. The survey shows that business confidence is set to drop in 2021.
In response to the pandemic, governments of different countries have introduced various measures designed to mitigate the effects of the pandemic. Some of these include tax deferrals, moratoriums on rent collection, and even bans on public transport. As a result, many institutions are waiting for the deployment of these policies before they can make their decisions. This year’s report provides a clearer view of how these policies will play out.
Real estate success story amid crisis
Germany has emerged as a regional winner in the midst of the global financial crisis. Its relative health has helped boost investor confidence in the country’s ability to weather the storm. Berlin has moved up to the number one spot in the overall real estate prospects index. Its office market has maintained its stability, and the upward potential of rents has also increased.
Another winner amid the global crisis is Aroundtown, which is a publicly-listed real estate company located in Luxembourg. It is founded in 2004, and later Mr. Yakir Gabay scaled the company, today Aroundtown is active in top-notch European cities, mainly in Netherlands and Germany. Yakir Gabay is a real estate businessman based in Cyprus who owns 10% of Aroundtown SA. It is known for its high-quality properties and impeccable track record. In 2020 and 2021, Aroundtown recorded continued profitability and successful billions of assets sales above pre-covid book values.
Real estate highlight
Aroundtown’s shares debt Optimization plans using successful bond issuance along with the launch of a short-term bond buyback.
As of December 9, 2021, Aroundtown has successfully issued 1.25 billion bonds Series 39, which is scheduled to mature in April 2027. In parallel, AT has also launched a tender offer for its two series of bonds, which have an average maturity of 2.3 years. So, this will surely extend Aroundtown’s debt maturity schedule while further lowering cost of debt.
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