The crisis caused by the Covid-19 has had a full impact on the real estate sector, which bases a large part of its operations on presence. Both from the developers point of view, with the works stopped by decree for two weeks, and from the investors, with the impossibility of seeing the assets or signing the contracts, the “real estate” is experiencing a hiatus in its activity. It is the “proptech” that have also been affected by this phenomenon and have had to stop the physical part. Despite the situation, they have been able to continue working on the product and have dedicated the confinement to an improvement in the technological part of their products as well as the contact with customers and the positioning of the brand.
The Government will make a credit line worth 1,200 million euros available for rental subsidies. The Government expects these loans to benefit 450.000 tenants who have been affected by the Covid-19 crisis. The loans will be granted through the Official Credit Institute (ICO) and guaranteed by the Ministry of Transport, Mobility and Urban Agenda. These loans will have no interest or associated costs and will be transferred directly to the owners of the properties to eliminate the possibility of non-payment by the tenants.
Some “proptech” have taken advantage of the confinement to launch new products or offers. Most of these companies are betting on trying out new digital services that after the health crisis they plan to continue offering their clients, such as the use of video calls or the possibility of signing contracts electronically. Other tasks they are taking advantage of in this situation are contacting investors, both to address decision making and to deal with capital increases.
“The last quarter of the year is going to be a time of frenetic activity for investors,” said the CEO of Colliers International Spain, Mikel Echavarren, speaking about the Spanish real estate sector. For his part, the General Manager of Cushman & Wakefield, Jesús Silva, stressed that “there is a lot of liquidity in the market“, as “investment alternatives (equities, bonds, fixed income, etc.) continue to be heavily penalised”. Therefore, he stressed, “real estate is still very attractive“. Although in March investment has fallen by around 70%. Cristina García-Peri, Head of Business Development & Strategy at Azora, agreed with her colleagues that transactions are paralysed “except for those that were very advanced”, but “we believe that it will return”. There is the intention shown by Mazabi to invest around 500 million this year (200 million in hotels), and she has confirmed that they want to continue in the market as they are medium-term investors and what is happening has not altered their vision of the future.
Echevarren has made it clear that the circumstances we are experiencing right now have nothing to do with those of 2008, he has pointed out that after the first years of the previous crisis, the vast majority of asset holders were forced to sell due to pressure from the banks, “which in turn had a brutal liquidity problem”. However, at present, the sector is not very indebted, with a few exceptions, and the attitude of the banks is “radically different“. The banks are giving their clients all the facilities in the world to grant shortages, facilitate this bitter cup and it also seems that the ECB is going to relax the capital ratios and the consideration of arrears,” he said.