Like countless other sectors, the COVID-19 crisis has struck the listed real estate (LRE) companies and the broader real estate sector in an unprecedented way. After the pandemic was declared by the World Health Organization in March 2020 and when the sanitary crisis was at its peak a couple of weeks later in Europe, no one could have imagined the long-run economic and social struggles that would be endured in the following months.
Numerous financial and non-financial consequences for the property companies have stemmed from the decreed lockdowns in the vast majority of the European countries. Shops were closed, with rent payments postponed for many retail tenants. Offices became empty following governments’ guidelines to work from home. And lingering doubts have taken hold of investors for an undetermined period.
In addition to these direct gaps in earnings, the fundamental changes that COVID-19 has brought in the way we live, work and shop will undoubtedly shift the landscape of the more traditional real estate sectors in the upcoming years.
However, amid aggravations of financial, medical and social situations within the European countries and their population, the LRE sector has revealed a previously unseen momentum of solidarity with numerous corporations and companies launching invaluable social initiatives to support communities.
The majority of these initiatives were designed to provide immediate relief to the first-impacted population, thanks to the direct use of properties. Medical staff benefitted from student dorms and hotel rooms to stay in closer to their workplace to avoid bringing the virus back home and infecting members of the family. These spaces have also welcomed women and children victims of domestic violence, which has drastically increased during the confinement. Other spaces, such as shopping malls, offices and parking spots, were made available to health and charity associations to welcome food hubs, mobile blood banks and transfusion units.
In addition, unprecedented financial support was raised all over Europe with no less than EUR 5 million donated to local charities and non-profit organisations. This assisted their fight against COVID-19 by providing medical materials, such as masks, and enabling them to distribute food to the homeless and fragile population.
Partnerships and active collaborations with social associations, as well as the launching of new funds, have also seen the light of day, enabling work on the long-term – and sometimes still invisible – impacts of the pandemic. Focusing on employability by supporting disadvantaged students’ training and scholarships or creating new inclusive community spaces are in the pipeline for several property companies.
In this difficult time, property companies have not only stepped up in fulfilling their responsibilities for supporting their vulnerable tenants by renegotiating leases and reallocating spaces; they have also brought vital contributions to suffering communities.
The LRE sector has heard and responded to the rallying calls of European governments. The ‘S’ of Environmental, Social and Governmental (ESG) has undeniably prevailed over this first half of 2020. And one can be confident that this impetus of unity will become a turning point of a prolonged trend, alongside other major environmental priorities.