Invesco Real Estate – European Market Outlook H1-2021

European economies are on a steady recovery path over 2021-22, rebounding from the impact of COVID-19 in 2020. The pace and scale of the recovery from this impact varies, and from a real estate perspective we have to factor the shape of the economic recovery into our considerations for each market, both in terms of our thinking about strategic merit of current holdings, as well as where potential opportunities may lie going forward.
For European real estate markets, the investment considerations at present focus on the medium-term outlook for sectors, and the extent to which these may have changed as a result of COVID-19. We remain clear in our view that the current global pandemic caused a significant short-term disruption without directly changing any of the longer-term structural changes that were influencing real estate. However, for certain sectors, the reaction to COVID-19 accelerated structural changes which were already occurring, such as the increase in online retailing.
Overall, the fundamental outlook remains supportive for investment in yield assets, and with significant volumes of capital waiting to deploy across global real estate markets, the outlook remains supportive for the sector.