House Prices Will Take Between Two and Seven Years to Recover to their 2019 Levels

Before this crisis, we expected a return to the highest ever house prices of 2008 during 2025. Now, that goal will be delayed by between two and five years, according to the consultancy AIS Group.

House prices will take between two and seven years to recover the levels recorded in 2019 due to the impact of coronavirus, according to a report by the AIS Group. The consultancy has made these forecasts based on two possible scenarios: one expected, in line with an 8% drop in GDP, but with a rapid recovery; and another more pessimistic, based on a “slower” recovery.

In the scenario prior to the Covid-19 crisis, we expected the recovery of house prices to continue, after the falls of 2008 and 2013. However, AIS considers that the emergence of the coronavirus and the economic impact of the measures to contain the pandemic will make prices fall again.

Realia Earns 22% Less due to Covid-19 and Refinances its Debt to 2025

The real estate company controlled by Carlos Slim has closed the first quarter with a profit of €3.92 million. It has also announced the novation of its syndicated loan until 2025.

The listed real estate agency, Realia, closed the first quarter of 2020 with a profit of €3.94 million, down by 21.9% compared to the same period a year earlier.

The company, which is dedicated to property development and rental activities, increased its income and operating result (EBITDA); however, the increase in its provisions for Covid-19, which went from a gain of €74,000 to an expense of €1.87 million, weighed down its net result.

Neinor Homes will Disinfect Against Covid-19 the 1,700 Homes it is going to Deliver This Year

Neinor Homes will disinfect against Covid-19 all of the homes scheduled for delivery in 2020.

Neinor Homes will disinfect against Covid-19 all of the homes scheduled for delivery in 2020.

This initiative, which according to its business plan will be applied to more than 1,700 units, aims to guarantee the hygiene and safety of all of its properties to their new owners at a time as special as the delivery of their new home.

Four out of 10 Logistics Owners have Suspended Investment Operations

According to a survey about the effects of COVID-19, conducted by the consultancy CBRE, 62% of those consulted consider that the path towards some kind of normality will begin in the last quarter of the year.

According to a survey conducted by the consultancy CBRE with the main owners and property developers of the industrial sector about the effects of Covid-19, 62% of those consulted consider that the journey “towards some kind of normality in the sector” will begin in the last quarter of the year

Meanwhile, 23% predict that the industry will not resume its normal activity until 2021, and the remaining 15% consider that the recovery will begin in the third quarter of this year.

Merlin Clings to its Office Business to Protect itself from the Impact of Coronavirus

The largest Spanish Socimi forecasts a maximum decrease of 9% in its annual income from its shopping centres after it waived their rental payments, something it has not done with its offices and logistics assets.

The large Spanish real estate companies are beginning to take stock of the impact of the Covid-19 coronavirus epidemic on their businesses. Such is the case of Merlin Properties. The Socimi with the largest number of rental assets in the Spanish market has revealed, in a call with analysts, that the closure of non-essential commercial establishments decreed by the State of Emergency will result in a decrease in its annual income from that type of property.

Specifically, Merlin, whose shopping centres generate 23% of its gross income, points out that only 23% of the stores in its commercial establishments are currently open. The company has given those tenants a 100% payment holiday on their rents for as long as the State of Emergency lasts.

Banks come to the Rescue of the Real Estate Sector with Loans and One Year Grace Periods

Real estate companies are already negotiating with their financial institutions to defer payments by three months and to secure new lines of ICO financing with one-year grace periods.

“We have just refinanced a €50 million loan with a grace period of 12 months. The banks are being amazingly positive”. Those were the words of one senior executive of a real estate consultancy regarding the role of financial entities in helping the real estate business manage the impact of Covid-19. “It has been a dream response,” said one large owner of commercial properties in Spain and Portugal.

The role of the banks, both Spanish and international, is going to be key to ensuring that the Spanish real estate sector does not repeat the crash experienced between 2008 and 2013. “The banks are going to be part of the solution and not part of the problem, although late payment and over-indebtedness will return”, predicts Juan Velayos, Managing Partner of Alantra.

Tourist Homes Expect Losses of €2.9 Billion, but Predict a Recovery in 2021

In an interview with Brainsre.news, Tolo Gomila, the President of Fevitur, has warned that the losses on tourist homes due to Covid-19 already amount to €448 million. And he believes that they will reach €2.9 billion in total.

The Covid-19 pandemic has forced the suspension of almost all the economic and productive activity in the country. Spain is facing its greatest health crisis in decades, which will undoubtedly lead to a new economic crisis. Covid-19 has affected every sector of the economy, but one of the hardest hit has been tourism, which has been seriously affected by restrictions on the movement of people, the closure of hotels and homes for tourist use, ERTEs and the mass cancellation of accommodation, events and flights.

Tolo Gomila, President of the Spanish Federation of Tourist Home and Apartment Associations (Fevitur), has indicated, in an interview with Brainsre.news, that this segment of the economy expects to incur losses of €2.9 billion due to the pandemic. As such, it has demanded new measures from the Executive to address the crisis that has caused coronavirus in the country and the rest of the world.

Merlin & Colonial Will Lose More than 11% of their Rental Income, According to Barclays

The British bank estimates that the two Socimis will experience a decrease in gross rental income of between 11% and 15% this year.

Barclays forecasts a difficult immediate future for the large property owners in Europe due to the crisis caused by the Covid-19 coronavirus. The bank has carried out a study of the large listed real estate companies on the continent and predicts a significant impact on rental income in segments such as hotels, student residences and retailers, as well as in offices. In its analysis, the financial institution has reduced its income forecast for the two large Spanish Socimis: Merlin and Colonial.

“We believe Merlin will be impacted by Covid-19, especially in the retail sector,” said Barclays. The financial institution points out that Merlin has already communicated to the market that its rental income will fall by a small proportion, as a result of rent renegotiations with the tenants of commercial premises that are closed and cannot afford to pay. For this reason, the bank’s report reflects a decrease in gross rental income this year of 15% as a result of the effects of the coronavirus crisis, although it expects rents to recover by 10% in 2021.

Real Estate Companies Reset their Strategies for the Post-Coronavirus World

Real estate companies are preparing to escape the doldrums generated by the coronavirus with both defensive and commercial business strategies.

Real estate companies are preparing to overcome the slump caused by the Covid-19 coronavirus pandemic as soon as possible with both defensive and commercial business strategies. They intend to reorient themselves towards changes in consumption and to lower forecast purchasing power.

Several executives have explained the way in which their companies are facing this post-pandemic challenge. A few days ago, Juan Fernández-Aceytuno, CEO of the appraisal company Sociedad de Tasación, revealed that his company has chosen to reduce wages and cut expenses rather than implement temporary redundancies (an ERTE or ‘temporary employment regulation file’ in Spanish).