European REIT Industry Growth, Trends, COVID-19 Impact, and Forecasts 2022 - 2027 - ResearchAndMarkets.com

DUBLIN--(BUSINESS WIRE)--The "Europe REIT Industry - Growth, Trends, COVID-19 Impact, and Forecasts (2022 - 2027)" report has been added to ResearchAndMarkets.com's offering.

REITs are companies that own (and often operate) income-producing real estate, such as apartments, warehouses, self-storage facilities, malls, and hotels. Their appeal is simple: The most reliable REITS have a track record for paying large and growing dividends.

Still, that potential for growth carries risks that vary depending on the type of REIT. European Public Real Estate Association (EPRA), as a partner of Real Estate Equity Securitization Alliance (REESA), plays a key role in the continued growth of the REIT approach to real estate investment across the region.

IPOs have been subdued over the past 12 months and this is partly due to global political and economic uncertainties such as Brexit. Continued growth in the European listed real estate with M&As and the rise of the alternatives sector remain to be the important drivers of REITs industry.

In the United Kingdom, there are 56 REITs with a market cap of 89.5 billion USD and in Europe (excluding the UK) there are 151 REITs with a market cap of 420 billion USD as of September 30, 2019.

Key Market Trends

COVID-19 Impact on REITs Performance in Europe

The pandemic has driven many unwarranted bad results across economies and the REITs industry in Europe is no exception. Also when the markets are low, a good estimation can create abnormal results.

In a volatile environment, core-income producing assets in safe-haven locations across Europe are likely to remain in demand. With risk-free rates near historic lows, real estate's comparative yield advantage is even more compelling, and the recent fall in Sterling is significant enough to materially enhance the attraction of UK real estate for overseas purchasers.

Meanwhile, a pause in construction and a likely reduction in future construction finance will magnify the overall lack of new stock in the UK for some time.

REITs Importance in Residential Real Estate Investments in Germany

Germany is the largest real estate market in Europe. About half of the real estate properties located are residential by nature. With Special Funds and REITs occupying the majority stake in residential real estate investments in Germany, REITs have an important role to play in the industry.

Also given the pandemic conditions, the existing REITs with exposure in Germany have suffered a negative 16% performance in their market capitalization during January 2020 to April 2020. Thus providing the right time for new investments.

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