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Covid-19 crisis should change investors’ strategies
16 April 2020 |

Besides leaving deep scars on the world’s economy, the Covid-19 pandemic crisis should also change investors’ strategies in the mid-term, leading them to seek new ways of generating liquidity in a very different real estate market.

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The real estate scenario should change, with new opportunities generated by the pressure of the market and, on the other hand, new needs in terms of demand. And it will be this real estate market disruption that will be, according to experts present at the webinar «Capital Raising During Market Volatility», organized by the Real Estate Fund Intelligence, the basis for the change in investors’ strategies.

The «stress» and «pressure» we are currently under might force some companies to place their assets on the market, betting on a divestment strategy, according to Taylor Mammen, Senior Managing Director & Director of Institutional Advisory Services at RCLCO. But, on the other hand, companies which show greater resilience towards the crisis and greater liquidity see in those assets new investment opportunities, mainly because they will be placed on the market at «lower prices, offering companies a competitive advantage». According to Linda McDonald’s, Senior Vice President and Alpha Investment Research at Segal Marco Advisors, «vulture funds will be better positioned than the rest» to face this scenario.

Health safety should become a significant factor in terms of demand

Changes in demand should also impact investors’ strategies. According to Taylor Mammen, office occupants should present a more demanding profile in terms of well-being, and, especially in terms of health safety, favouring wider office buildings with air filtration systems, for example. According to the expert, this will imply a strategy review from investors, who should choose between looking for new real estate products with those characteristics or refurbish the assets so as to comply with the occupants’ new demands.

Nevertheless, these changes will only become visible within 6 or 7 months, according to the experts. For now, the strategy adopted by most companies is to analyse their portfolios internally, manage their teams and manage the existing capital margins to face this crisis.