COVID-19 causes new challenges for the valuation profession

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.

Zoltan Szelyes

Head of Global Real Estate Research
Credit Suisse Asset Management

Zoltan Szelyes has started his professional career as Global Real Estate Analyst in Credit Suisse Research, where he built up the global real estate research from scratch and advised PB and AM clients in real estate between 2004 and 2007. In September 2007 he joined the Swiss National Bank as Senior Economist in the Financial Market Analysis Department. In October 2018 he became Member of the executive management of the Swiss National Bank (SNB) Stabilization Fund. Zoltan oversaw the activities of UBS investment management and co-headed asset management. He was part of the successful liquidation of SNB StabFund and concluded the project that delivered a 3.8 bn USD profit for the SNB. In February 2014 Zoltan has re-joined Credit Suisse as Head of the Global Real Estate Research, where he has been responsible for the global real estate outlook and is a key driving force for the real estate market investment market strategy of the international real estate products. Zoltan is Vice Chairman of the INREV Research Committee, a pan European industry association of real estate investment managers and institutional investors. More »

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.

Christian Luft

Head of Pan - EMEA Valuations
JLL

Christian joined Jones Lang LaSalle in October 1998 as a graduate and has gained experience in a wide range of valuation areas. In October 2000 Christian joined Valuation Advisory and specialised in shopping centre valuations and transactional support in both the UK and also across Europe where he successfully established the Pan-EMEA retail valuation business since 2008. Christian leads the Pan-EMEA Valuation business and is responsible for a number of key valuation client mandates, developing and leading best practice across the EMEA Valuation business. Christian is directly responsible for developing expertise and best practice in shopping centre valuations and leads the EMEA Retail Valuation Group. Christian is a member of the IVSC European Board. More »