Already, more than £11 billion has been frozen in UK property funds as their appraisers warn the novel coronavirus that is locking down Europe has made it impossible to assess their value.
For retail and hospitality property owners, it could be fatal."The evolving Covid-19 outbreak could have profound effects on real estate," Peel Hunt analyst Matthew Saperia said."The implications could be far reaching, but quantifying these is highly speculative at present." The subsequent market turmoil has already played a part in forcing embattled UK retail landlord Intu Properties to postpone a £1.3 billion capital raise.
In London, buildings that were being prepared for sale, including an office leased to Deloitte, are now being held back, people with knowledge of the situation said. When the fog of uncertainty clears, asset managers will look to rebalance their allocations between equities, bonds and alternatives like real estate to factor in relative price movements that will affect their weightings.
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