UBS-AM Real Estate & Private Markets’ Real Estate Outlook paper focuses on the risk that the Coronavirus may pose to economies and real estate markets, particularly in Asia Pacific, inferring that any impact will be short-term if it is contained.
Additionally, the paper notes the dip in investment activity and share of international capital flows, with interest rate cuts leading to yield falls in some markets and real estate pricing being around average versus index-linked bonds. However the research team does not see a big inflation risk and their analysis suggests that real estate offers suitable inflation protection.
In addition to providing a global macroeconomic overview of the past few months, the paper also gives a deeper analysis of various regional real estate markets, including Europe. In 2019, the European market continued to see positive performance in occupier markets following a late fourth quarter surge in the investment markets. The team expects the softening economic fundamentals to continue to weigh on demand. As interest rates are unlikely to rise this year, they do not anticipate a price correction in 2020 despite yields in most cities reaching record lows.
Source : Company