European property stocks soared this week on hopes for a quick end to the pandemic after US pharmaceutical corporation Pfizer announced that its Covid-19 vaccine was found to be 90% effective.
Unibail-Rodamco-Westfield, Europe’s largest listed property group, saw its share price surpass €49 apiece on Friday, up 44% from €34 on the day prior to the announcement. All major European REITs and property stocks experienced upwards movements between 10 and 50% over the week with the shares of major retail property specialists Klépierre, Hammerson rising 50% and 35% respectively.
‘With timing of an effective vaccine becoming clearer, equity markets reacted ebulliently to what appears to be a light at the end of the Covid-19 tunnel,’ agent CBRE said in a statement.
The announcement has positive implications for commercial real estate, especially in large, high-density cities in the U.S. and Europe where the timeline on a ‘return to normal’ has become much clearer, the agent added.
‘We anticipate wide distribution of the vaccine in the first half of 2021 and a return to more normal economic conditions by the second half,’ CBRE said. During the latter half of 2021, office occupancy should materially increase and brick-and-mortar retail should more fully benefit from a resumption of activity, it added. ‘Nevertheless, we expect some residual effects of the pandemic—such as increased flexibility for office workers and consumer appetite for e-commerce—to remain prevalent beyond H1 2021.’
Full recovery in office, retail and hotels is expected to take more than two years.
