The coronavirus crisis continues to affect the real estate sector. While the office market, retail and hotels are coming under increasing pressure, the logistics sector is holding up well.
Working from home and flexible working models have led initial tenants to reduce their office space. However, Swiss Life Asset Managers believes that offices will remain an important place for personal encounters.
The pandemic and lockdown are also impacting retail. Supermarkets achieved strong sales, but this was supported by online shopping, which did not trigger demand for space. High street retail became less attractive as people stayed at home.
Hotels also remain under pressure and we expect investments not to return to pre-crisis levels before 2024. However, structural change in the sector is unlikely. The same applies to residential properties. It remains to be seen how economic development will affect the situation with increasing unemployment and regulation.
The clear winner of the crisis is the logistics sector. Rents remained broadly stable in 2020. The limited availability of space should further support this development.