By Cohen & Steers
The global health crisis and recession have turned property markets upside down in dramatic fashion, as shelter-in-place orders have given certain tenants the economic and political cover to avoid or delay rent payments.
With governments shutting down entire sectors of the economy, global REITs lost more than 40% of their value from mid-February to mid-March, before recovering half their losses following policymakers’ unprecedented response to provide liquidity to credit markets and financial support to businesses and households.
Year to date, global REITs have declined 23% through April, underperforming global equities by a surprising 11%. As a result, publicly listed real estate is trading at meaningful discounts to our view of private-market values. It appears the next few months will be challenging for many landlords. However, most public real estate companies have ample liquidity to withstand impaired cash flows through the crisis, in our view.