A comprehensive outlook on the European property investment landscape as well as the current challenges and opportunities the valuation profession faces were discussed at the latest online event organised by Property Forum and RICS. We summarised the key messages of our two keynote speakers.
Due to the corona shock and the disruption of global travel and value chains, we can expect a deep recession until Q3 2020. However, CEE economies seem to be less affected than in Western Europe. The real GDP growth of Germany will be -6.5 percent and of the United Kingdom -8.3 percent, while in Poland and in the Czech Republic the economy will contract by 4.3 percent and 6.2 percent in 2020, respectively. The economic recovery will start from Q4 2020 as demand will increase again, according to Zoltan Szelyes, Head of Global Real Estate Research at Credit Suisse Asset Management.
The corona shock has also caused a significant drop in transaction volumes and property valuations. The extend of value decline depends on the segment, location and asset profile of the property, he added.
Considering the insecurity of the markets, the unclear long-term impacts of the lockdowns and the limited liquidity, it is far more challenging than ever to determine the value of an asset. Close work and communication with clients are key to move forward fast after easing the lockdowns. The use of virtual tools and desktop valuation instead of personal inspections are becoming widespread. Yet, there are some concerns about the risks and limitations of the lack of physical visits. These include the accuracy of technical tools as key aspects can be missed, summarized Christian Luft MRICS, Head of Pan - EMEA Valuations at JLL.
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