The number of Covid-19 cases is tapering off, so is the number of people in hospital due to the outbreak, and the number of deaths linked to the virus is downtrending too. Europe is in a wary reopening phase after the Covid-19 pandemic, and week after week social activity is getting back to normal. Similarly, the market for commercial and investment properties is getting back on track with more normal activity. Colliers predicts that H2 transaction volume will be more than double the volume recorded in H1.
It is still too early to gauge the depth of the economic downturn caused by global lockdowns on account of Covid-19. However, so far things have turned out just fine in the Danish retail and restaurant industries: Customers have been quick to return. Hopefully, the same will happen for the travel and tourism industries once travel restrictions are lifted.
Presumably, the slowdown in the global economy is bound to drive up unemployment rates for a prolonged period of time. But then again, worldwide fiscal and monetary easing on an unprecedented scale will prevent deep and long-lived recession.
Colliers believes in a strong increase in investment activity
Global stock markets have already seen a very strong rebound following dramatic plunges in March. It is hardly because the markets expect business earnings to be back to pre-corona levels any time soon, but rather because central banks are pumping so much liquidity into the market that stock prices will invariably go up.
The same trend can already be witnessed in the investment property market. We see a sharp increase in investment demand, in particular for properties in the residential, office and industrial/logistics segments, and irrespective of travel restrictions, international investors have already returned to the Danish market.
We are therefore confident that H2 2020 already will see a surge in investment activity, with a transaction volume of more than twice the volume seen in H1. By the same token, we have adjusted our prognosis for price movements upward. We now believe in stable prices in the two largest segments, residential and office, and we expect prices to climb in the industrial and logistics market. The market for retail property will be affected in different ways: In the market for high-street properties and big boxes, investors will remain guarded, with properties trading at prices below pre-corona levels. As far as supermarket properties are concerned, however, it is fair to expect stable or possibly slightly uptrending prices.