CEE REAL ESTATE COVID-19 - f.datasrvr.com · COVID-19 & Real Estate Impact CEE Travel & Visitor...
Transcript of CEE REAL ESTATE COVID-19 - f.datasrvr.com · COVID-19 & Real Estate Impact CEE Travel & Visitor...
Colliers International 20201
CEE REAL ESTATE COVID-19
Special Insights Series – Opportunities and Challenges in Extraordinary Times
Q1/Q2 2020
Colliers International 20202
COVID-19 HeadlinesOpportunities & Challenges
…Economies…
…Retail / F&B...
…Labour / Wages…
…Negotiations of Leases…
…Construction…
…Unlocking / Lockdown…
…€ Rents & FX rates…
…Automotive & Production…
…Space Optimisation/Density…
…Online Sales & Supply Chain…
…Travel & Tourism…
…Environment…
…Home Office…
… Central Banks / Government Aid…
…Nationalisation…
…Technologies…
…Corporate Values/Debt…
…RE Pricing/Values…
Colliers International 20203
COVID-19 & Real Estate ImpactCEE Travel & Visitor GuideWith COVID-19 cases appearing to be peaking and tailing-off, many countries have announced phased plans to ‘exit from lockdown’. As a result, businesses are cautiously keen to get back to business, and while it may not be possible to return to ‘normal’, a return will happen. Whether they are Investors, Occupiers, Banks or Developers, many of our Clients are also keen to get back to business, to continue with ongoing projects and look at new opportunities. However, much of this requires some level of physical inspection before they are willing to put in a bid or sign on the dotted line. So, what is the status and are the CEE countries open for business? Well, unfortunately it is no longer a simple case of booking travel and accommodation and heading for the airport, or jumping in the car so, we at Colliers thought we would provide you with a simplified guide to the current travel and visitor status around the region, looking at the following key criteria:
• Entry to Country Permitted? A key criteria based on whether or not a country’s borders are open or not. Potential visitors are often restricted based on their source country and in the case of CEE, this may be limited to EU countries in some cases or much tighter restrictions in terms of only allowing citizens or those holding residence permits (incl. family members).
• Quarantine and health requirements on entry? Although borders are slowly opening up, many countries are maintaining measures to limit the growth of new cases from international travelers by imposing quarantine/self-isolation of up to 2 weeks. (Depending on your home country, you must also check the return conditions from the countries you intend to visit.) In some markets, a valid (negative) test certificate is sufficient for presentation at the border control and although it may have just a few days of validity, this may be sufficient to carry out the necessary property viewings for example.
• Methods of entry: The most common entry method for many clients would be by plane but, routes in and out of the region vary between countries and remain fairly limited at present. This is a similar case for train and bus routes as they all try to solve the issues around capacity and health requirements. On top of that, it also needs to make financial sense to run the service and be reliable for the return journey.
• Purpose of visit required? Many markets still remain quite strict on who they allow in, but some have a process to support business continuity which requires both parties in a trade to provide some relatively simple admin on top of any other health requirements.
• Accommodation and getting around: The ability to have somewhere to sleep and the means to safely travel around the city or country by taxi or hire car is also important. Many of these services are operating with additional measures implemented to protect people, for example plexi-glass screens in taxis between the driver and passengers.
• Access to properties (viewings): The ability to view a property does vary but, in general there are not that many official restrictions in place. In almost all cases, you would most likely be organizing a property viewing through the owner, their agent or, the property manager who should be able to advise you of any specific requirements. Be prepared that some occupiers may refuse any non-employees to visit their space in order to limit the chances of transmission. In addition, be prepared to follow local measures implemented in regard to hygiene, such as temperature checks, disinfection and the wearing of facemasks and gloves. These may often go over and above any official requirements but, will be important to provide the level of confidence required for users of the property to return to some level of normality.
In summary, the following statistics and summaries are based on publicly available information at the date of update (11-18th May) and are subject to regular change. Whilst we would very much like to welcome you to the region to do business, we also regard all of our health interests with the highest of priorities. Checking with your country’s consular service and relevant destination airports on a regular basis will also keep you well informed.
We hope to see you soon and, in the meantime, stay safe!
Colliers International 20204
COVID-19 & Real Estate ImpactRecovery Cycle: 18th May
Colliers International 20205
Bulgaria Czech Republic Hungary
Entry to Country Permitted Restricted (mainly to nationals, residence permit holders and essential workers) Yes (subject to conditions) Yes (subject to conditions)
Quarantine required on Entry
Yes, (currently 2 weeks), with some exception/conditions) . No (subject to fulfilling conditions - see health requirements ) Yes (currently 2 weeks)
Methods of EntryAirplane and Car, subject to the conditions for entry into the country. All cross-border trains to/from the country are suspended.
Airplane, Train and Car.Currently limited routes are available in and out by plane and fewer by train. Cars may have additional complications if traveling from a non-bordering country.
Airplane, Train and Car.Currently limited routes are available in and out by plane and fewer by train. Cars may have additional complications
Purpose of VisitRequirements / Geographical sources
EU and Schengen nationals and third country nationals can enter and visit Bulgaria, only if they are directly engaged in the construction and safety of strategic and critical infrastructure of Bulgaria, certified investment projects and other important economic activities for Bulgaria, certified with a letter by the minister of economy or other relevant minister.
European citizens can visit if they can prove economic activity by completing a form and is signed by the Czech company/Entity they are visiting.
Non-European citizens are currently not permitted entry.
Citizens of South-Korea, Czechia, Germany, Slovakia, Poland, Austria can visit if they can prove their business activity and they have completed a form of request at the website of the police.
Health Requirements
Wearing of protective masks or other face coverings is mandatory only in closed public places e.g. public transport, shops, etc. All persons in open public places are required to keep social distrancing and all anti-epidemic measures, but in case of contact with other people wearing of protective mask or other face covering is mandatory.
Need to a produce negative COVID test (less than 4 days old) If the trip is less than 72 hours they do not need to be retested or go into quarantine. Conditions of return to home country may vary in terms of quarantine.Face masks must always currently be worn outside and are generally recommended along with other common preventative measures.
Need to a produce negative COVID test (less than 4 days old) or stay in qurantine for 14 days if you did not do that before the trip. Face masks must currently be worn at the public transport and in the shops.
Bordering Countries Romania, Turkey, Greece, Macedonia, Serbia Germany, Poland, Slovakia, Austria Slovakia, Ukraine, Romania, Serbia, Croatia, Slovenia, Austria
Flight source/destination operational
Updated info can be found at http://sofia-airport.bg/en/passengersAmsterdam, Frankfurt, Stockholm, and Paris (as of May 18th), Kiev and Bucharest and Odesa May 25th), Minsk, Sofia. Updated info can be found at http://prg.aero/en#/
Berlin, Frankfurt, Athén, Barcelona, Bázel, Berlin, Birmingham, Dortmund, Eindhoven, Göteborg, Liverpool, London, Madrid, Podgorica, Szarajevó, Stockholm és Marosvásárhely, Doha, Zürich, Dubai, Luton. Updated info can be found at http://bud.hu/en
AccomodationHotels and other accommodation can open as of May 14th subject to compliance with the requirements for social distancing and anti-epidemic measures.
Hotels are due to open from May 25th Subject to owner/operator. Hotels can operate in the country with their catering services from 1st of June.
Getting AroundCar rentals and Taxis are operational. Public transport operates with some capacity restrictions and health/social distancing requirements such as wearing of protective masks.
Car rentals and Taxis are operational. Public transport operates with some capacity restrictions and health/social distancing requirements.
Car rentals and Taxis operate. Public transport operates with health/social distancing requirements.
Access to Properties
Public access to some properties types is prohibited. Access to other properties is permitted subject to compliance with the entry regime and measures, imposed by the owner/manager and the mandatory anti-epidemic measures /such as social distancing, regular desinfection, wearing of protective masks, etc.
In general there are no official restrictions on entry to properties. Some tenants may require advance notice or may refuse entry to their spaces. This should be managed in advance through the owner/property manager and may require certain health precautions to be taken as listed and stipulated above.
In general there are no official restrictions on entry to properties. Some tenants may require advance notice or may refuse entry to their spaces. This should be managed in advance through the owner/property manager and may require certain health precautions to be taken as listed and stipulated above.
COVID-19 & Real Estate ImpactCEE Travel & Visitor Guide
Colliers International 20206
Poland Romania Slovakia
Entry to Country Permitted Yes (subject to conditions) Yes (subject to limited conditions, mainly professional reasons) Restricted
Quarantine required on Entry
Yes (currently 2 weeks) Yes (currently 2 weeks, only if COVID-19 symptoms are present) Yes (currently home isolation of 2 weeks) and test for COVID-19
Methods of EntryThe border with Germany, the Czech Republic, Slovakia and Lithuania can only be crossed in designated places. International flights and rail connections are suspended.
Airplane, car (limited routes available for airplanes - subject to a review late May/early June, with many terrestrial border points closed as well)
Bus and Car through designated border-crossing points.
Purpose of VisitRequirements / Geographical sources
European citizens can cross the border if they work in Poland or have residency.
Foreigners traveling for professional reasons (and providing proof of this) are allowed entry. EU citizens benefit from a longer list of exceptions allowing entry, like having relatives in Romania or having a long-term visa for residency in the country.
Entry is restricted only to Slovak citizens and mainly foreigners with residency in Slovakia or persons living within 30km from the border and commuting for work to Slovakia, students (conditions apply), foreign diplomats, freight transport drivers, health service crews, funeral service employees.
Health Requirements Face masks must currently be worn at all times outside and gloves are recommended. No guidelines as to how border traffic will take place after the borders are opened and what the restrictions will be.
Face masks are mandatory in public spaces/areas.Quarantine period can be skipped if COVID-19 symptoms are not present.
Face masks must currently be worn at all times outside and are generally recommended along with other common preventative measures. Change in rules regarding wearing masks are currently being reviewed. COVID-19 testing should be taken at a state organised facility with rules in place to isolate those with positive results.
Bordering Countries Russia, Lithuania,Belarus, Ukraine, Slovkia, Czech Republic, Germany Ukraine, Moldova, Bulgaria, Serbia, Hungary Poland, Ukraine, Hungary, Austria, Czech Republic
Flight source/destination operational
All passenger flights have been banned until May 23rd. All Polish airlines (LOT )domestic and international flights are cancelled until May 31st. Updated info can be found at http://lotnisko-chopina.pl/en/index.html
London, Oslo, Stockholm, Athens, Malmo available as of mid-May, new routes could open subject to demand. Updated info can be found at http://bucharestairports.ro/
None. Bratislava airport is currently closed. Updated info can be found at http://bts.aero/en/
AccomodationHotels are operational from May 4th, restaurants opened on May 18th and additional services will be open in the 4th stage of the lockdown exit
Some hotels / apartments remain open.Short term accommodation (up to 10 days) are currently operational. Hotels are due to open in Stage 4 of the COVID-19 measures release, estimated May 20th (subject to government approval).
Getting AroundCar rentals and Taxis are operational. Public transport operates with some capacity restrictions and health/social distancing requirements.
Ground transportation (taxis, public transportation) is operational, though not functioning at full capacity.
Taxis are operational (subject to the availability of the protective plastic shield). Public transport operates with some capacity restrictions and health/social distancing requirements.
Access to Properties
In general there are no official restrictions on entry to properties. Some tenants may require advance notice or may refuse entry to their spaces. This should be managed in advance through the owner/property manager and may require certain health precautions to be taken as listed and stipulated above.
No specific limitations for access to properties, though there are rules and limitations to the office workplace in general (like wearing a mask). Contact with landlord/property manager prior to visit is advised.
Property visits require advance notice and in general should be managed with the owner/property manager. Additional safety precautions, such as temperature checks, disinfection, face masks, etc. are required.
COVID-19 & Real Estate ImpactCEE Travel & Visitor Guide
Colliers International 20207
Q3 / Q4 2019
CEE INVESTMENT COVID-19Special Insights Series – Opportunities and Challenges in Extraordinary Times
Q1 2020
Colliers International 20208
CEE Investment flows by Country: 2007 – Q1 2020Q1 2020 volumes at ca. €3.91 bn … Q2 volumes onwards will be impacted
PL & CZ take 86% share of Q1 volumes
0
2
4
6
8
10
12
14
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 Q1 2020
Poland Czech Republic Hungary Romania Slovakia Bulgaria
Source: Real Capital Analytics, Colliers International (Volumes exclude Land and DevelopmentColliers International 2020
Colliers International 20209
CEE Investment flows by Sector: 2007 – Q1 2020Residential makes the headlines Q1 with €1.3 bn deal
Office and I&L take transactions take 27% & 26% shares respectively
Source: Real Capital Analytics, Colliers International (Volumes exclude Land and Development
0
2
4
6
8
10
12
14
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 Q1 2020
Other Hotel Residential Industrial Retail Office
Colliers International 2020
Colliers International 202010
◼Banks and owners are currently assessing their current loan/asset
portfolios, and are paying particular attention to covenants
◼Relationship clients and prime assets are likely to be preferred
◼Financing for Office and Logistics assets will also be favoured over
Retail and Hospitality.
◼Financing developments may be limited until effects of COVID
have some further clarity
◼Real estate however continues to be viewed as attractive asset
class vs. other investment vehicles and strategies
◼The current restrictions on movement is delaying many deals but
are expected to return once inspections are possible.
COVID-19 & Financing of TransactionsWhat does this mean for CEE?
Indicative investment debt /
Margin Conditions*:
2.0 - 3.5% @
50-60% LTV*The terms quoted are a range for Poland-Romania and will vary depending on various property related
fundamentals, plus the asset class and origin of the bank (domestic/international).
Colliers International 202011
Q2 2007 Q4 2019 Q2 2007 Q4 2019 Q2 2007 Q4 2019
GERMANY (BLENDED) 4.70 2.95 5.65 4.45 6.50 4.20
CZECH REPUBLIC 5.75 4.00 5.50 4.75 6.50 5.25
POLAND 5.75 4.50 6.50 5.25 7.50 6.50
HUNGARY 6.25 5.00 6.00 5.50 7.00 7.00
SLOVAKIA 6.50 5.50 6.50 5.00 6.75 6.50
ROMANIA 6.00 7.00 7.00 6.50 9.00 8.25
BULGARIA 8.00 8.00 7.30 7.25 9.00 9.50
MARKET OFFICESSHOPPING
CENTRES
INDUSTRIAL
& LOGISTICS
CEE & German Prime Yields: Q2 2007 vs. Q4 2019At YE 2019 almost all yields had well surpassed pre-GFC levels
Where to next?
Colliers International 2020
Colliers International 202012
GFC
COVID-19 & Real Estate ImpactCEE Prime Office Cap Rate (%) Trends
2.00
3.00
4.00
5.00
6.00
7.00
8.00
9.00
10.00
11.00
Q1
200
7
Q2
200
7
Q3
200
7
Q4
200
7
Q1
200
8
Q2
200
8
Q3
200
8
Q4
200
8
Q1
200
9
Q2
200
9
Q3
200
9
Q4
200
9
Q1
201
0
Q2
201
0
Q3
201
0
Q4
201
0
Q1
201
1
Q2
201
1
Q3
201
1
Q4
201
1
Q1
201
2
Q2
201
2
Q3
201
2
Q4
201
2
Q1
201
3
Q2
201
3
Q3
201
3
Q4
201
3
Q1
201
4
Q2
201
4
Q3
201
4
Q4
201
4
Q1
201
5
Q2
201
5
Q3
201
5
Q4
201
5
Q1
201
6
Q2
201
6
Q3
201
6
Q4
201
6
Q1
201
7
Q2
201
7
Q3
201
7
Q4
201
7
Q1
201
8
Q2
201
8
Q3
201
8
Q4
201
8
Q1
201
9
Q2
201
9
Q3
201
9
Q4
201
9
Sofia Prague Budapest Warsaw Bucharest Bratislava
Colliers International 202013
COVID-19 & Real Estate ImpactValue Sensitivity Based on Change of NOI & Cap Rates
Cap Rates
Ch
ange
on
NO
I
0.0% 4.50% 4.70% 4.90% 5.10% 5.30% 5.50% 5.70% 5.90% 6.10%
-2.0% -2.0% -6.2% -10.0% -13.5% -16.8% -19.8% -22.6% -25.3% -27.7%
-4.0% -4.0% -8.1% -11.8% -15.3% -18.5% -21.5% -24.2% -26.8% -29.2%
-6.0% -6.0% -10.0% -13.7% -17.1% -20.2% -23.1% -25.8% -28.3% -30.7%
-8.0% -8.0% -11.9% -15.5% -18.8% -21.9% -24.7% -27.4% -29.8% -32.1%
-10.0% -10.0% -13.8% -17.3% -20.6% -23.6% -26.4% -28.9% -31.4% -33.6%
-12.0% -12.0% -15.7% -19.2% -22.4% -25.3% -28.0% -30.5% -32.9% -35.1%
-14.0% -14.0% -17.7% -21.0% -24.1% -27.0% -29.6% -32.1% -34.4% -36.6%
-16.0% -16.0% -19.6% -22.9% -25.9% -28.7% -31.3% -33.7% -35.9% -38.0%
-18.0% -18.0% -21.5% -24.7% -27.6% -30.4% -32.9% -35.3% -37.5% -39.5%
-20.0% -20.0% -23.4% -26.5% -29.4% -32.1% -34.5% -36.8% -39.0% -41.0%
Colliers International 202014
Q3 / Q4 2019
BULGARIA COVID-19Special Insights Series – Opportunities and Challenges in Extraordinary Times
Colliers International 202015
COVID-19 & EconomicsBulgaria
2,138 / 102
Cases GDP Unemployment
Aid Package Interest Rate Currency
is the current number of Covid-19 cases and
number of deaths in Bulgaria as of 15 May. Source: https://www.worldometers.info/coronavirus
- 7.2%is the current forecast of GDP growth in real
terms for 2020, down from 3.7% in 2019.Source: European commission
7%is the current forecast for the unemployment
rate in 2020, up from 4.1% in 2019.Source: European commission
In progress 0%
Source: Bulgarian National bank
%
1.96 lv
is the current value of the Bulgarian Lev
against the Euro to which it is pegged.
Source: Bulgarian National bank
The government outline and apply different
measures aimed at supporting the economy, the
most affected business and protecting the
employees.
Since 2016
Colliers International 202016
€ 85 million
Volumes TransactionsSplits by Sector
Yields
is the total commercial real estate investment
volume in Bulgaria for Q1 2020. 51%
increase compared to Q4 2019 and 17%
decline to Q1 2019.
6is the number of recorded transactions inQ1
2020, resulting in an average ticket size of ca.
€14 million.
22%
Sources of Capital
75%
3%percentage share of total volumes by sector
#Offices
Retail
Land
%
7.25%
8.00%
9.5%
Offices
Retail
Industrialare the prime yields as of Q1 2020.
COVID-19 & InvestmentBulgaria
Outlook
• Banks have slowed down lending for new
projects, continue funding real estate
acquisitions with slightly revised terms.
• Buyers are considering properties more
cautiously. Transactions on a final step are
continuing.
• The economy slowdown will impact the
speed of delivery of the construction pipeline
to the market in the next 2 years.
84%
16%
Bulgaria
Belgium
Colliers International 202017
COVID-19 & OfficesSofia, Bulgaria
2.3 million m2
Stock Supply Vacancy
Demand Rents Outlook
is the total stock at the end of Q1 2020. A
growth of 1% compared to Q4 2019.
353,300 m2
is the current volume of space under
construction. A total of 105,000 m2 is expected
to be delivered in 2020.
11.2%is the current vacancy rate and represents ca.
258,100 m2 of available space for let.
26,800 m2
is the gross take-up for Q1 2020. The main
sector on the demand side was IT and
outsourcing (73% of all deals). Majority type of
deals were renegotiations (42%), followed by
expansion (20%), relocations (31%) and sublease
(7%).
€16.00is the current prime CBD headline rent per m2
/ per month. Net effective rents typically range
between 6-11% below headline.
• Pre-leases at a final stage of signing are being
finalized - a positive signal for the market.
• New transactions are moving at a slower
pace.
• Office occupiers in some sectors are aiming at
negotiating rent abatements or deferrals.
• Office landlords and tenants are preparing
and implementing action plans for returning
back to office.
Colliers International 202018
COVID-19 & IndustrialSofia, Bulgaria
1.72 million m2
Stock Supply Vacancy
Demand Rents Outlook
is the total stock in Q1 2020. A growth of 1%
since the end of 2019.
137,300 m2
is the current volume of space under
construction. A total of 83,000 m2 is expected
to be delivered in 2020.
7.2%is the current vacancy rate and represents ca.
77,200 m2 of available space for let. The
available space is mostly concentrated in
owner-occupied or class B projects.
19,500 m2
is the gross take-up for the period for Q1
2020. Net absorption is 12,500 sqm.
€4.70is the current prime headline rent per m2 / per
month. Net effective rents typically range
between 5-10% below headline.
• Logistics properties have faced some minor rent
renegotiations where landlords preferred to
vacate space or replace tenants as opposed to
provide discounts.
• Logistics market dynamics are business as usual.
• Revival in the interest in sale-leaseback deals
from both operators and investors.
• Automotive suppliers reopened their
manufacturing facilities, working on more and
shorter working shifts.
Colliers International 202019
COVID-19 & RetailBulgaria
796,000 m2
S/C Stock Supply
Retail Sales E-Commerce Outlook
is the total modern shopping centre stock in
Q1 2020.
40,000 m2
is the current volume of modern shopping
centre space under construction.
is the forecasted growth rate for retail sales
in 2020. This result is an increase Y-o-Y. (Source: Oxford Economics)
€55.00
is the estimated share of online sales from
total retail sales.
22% of the active population shopped online in
2019.(Source: Statista & Eurostat)
• Shopping malls will reopen on May 18th,
putting pressure on landlords to implement
new management protocols and to retailers to
organize staff and stock.
• Retail parks have been less affected as they
are operational.
• All restaurants and cafes with outdoor spaces
have been opened to public as of May 4th.
Rents
€37.00
€8.00-10.00
>3.5%6.3%
Shopping Centre for Sofia
Retail Parks for Sofia
High Street for Sofia
*Prime headline rents per m2 / per month
Colliers International 202020
Q3 / Q4 2019
CZECH REP. COVID-19Special Insights Series – Opportunities and Challenges in Extraordinary Times
Colliers International 202021
COVID-19 & EconomicsCzech Republic
8,480 / 298
Cases GDP Unemployment
Aid Package Interest Rate Currency
is the current number of Covid-19 cases and
number of deaths in CZ as of 18th May.Source: https://www.worldometers.info/coronavirus
-4.9%is the current forecast of GDP growth in real
terms for 2020, down from 2.5% in 2019.Source: Oxford Economics
4.7%is the current forecast for the unemployment
rate in 2020, up from 2.8% in 2019.Source: Oxford Economics
ConfirmedEnd of state of emergancy. (17 th May) Currently
providing company support programme,
compensation bonus for self-employed,
moratorium of loans and mortgages, postponing
of Electronic Sales Control System, etc.
0.25%is the current 2 week repo rate as of 11th May,
down 200 bps since the Covid-19 pandemic.
Source: Czech National Bank
%
27.60 CZKis the current value of the Czech Crown against
the Euro, a decline of ca. 10% since February.
Source: Czech National Bank
Colliers International 202022
€1.66 billion
Volumes TransactionsSplits by Sector
Yields
is the total commercial real estate investment
volume in Czech Republic for Q1 2020. Over
52% of full-year volume for 2019.
14is the number of recorded transactions in
2020, resulting in an average ticket size of ca.
€119 million.
10%
Sources of Capital
4%
78%percentage share of total volumes by sector
#Offices
RetailResidential
%
4.75%
4.00%
5.25%
Offices
Retail
Industrialare the prime yields as of Q1 2020
8%Hotel
COVID-19 & InvestmentCzech Republic
Outlook• Many of the transactions that are reasonably
advanced are continuing
• Newer transactions are progressing more slowly
with some bid dates or launch dates being moved
out to accommodate the situation
• Retail / hotel deals are expected to be the most
challenging
• On pricing, some investors consider that as the risk-
free rate falls, pricing will continue to remain
aggressive when the market is currently estimated
to bounce back in Q3 this year
93%
7%
W Europe
CEE Domestic
Colliers International 202023
COVID-19 & OfficesPrague, Czech Republic
3.67 million m2
Stock Supply Vacancy
Demand Rents Outlook
is the total stock at the end of Q1 2020. A
growth of 4.68% year-on-year.
253,700 m2
is the current volume of space under
construction. A total of 151,100 m2 is expected
to be delivered in 2020.
5.37%is the current vacancy rate and represents
ca. 197,280 m2 of available space for let.
69,600 m2
is the gross take-up for the Q1 2020. Net
take-up for Q1 reached 53,500 m2. This is
39% decrease Y-o-Y.
€22.5 - €23.5is the current prime headline rent per m2 / per
month. Net effective rents typically range
between 10-20% below headline.
• Over 90,000 m2 due for completion during
Q2 2020. Some projects can be affected by
the availability of materials or labour
workers.
• Vacancy rate is expected to increase but to
remain in healthy levels.
• Future expansions in terms of office size
can be re-evaluated.
Colliers International 202024
COVID-19 & IndustrialCzech Republic
8.7 million m2
Stock Supply Vacancy
Demand Rents Outlook
is the total stock at the end of Q1 2020. A
growth of 8.2% YoY.
82,000 m2
is the current volume of space under
construction from Q1. A total of 534,000 m2 is
expected to be delivered in 2020.
5.5%is the current vacancy rate and represents
cca. 476000 m2 of available space for let.
271,500 m2
is the gross take-up for the period Q1
2020. This is 24% decrease Y-o-Y.
€4.70is the current prime headline rent per m2 / per
month. Net effective rents typically range
between 9,1%-5,8% below headline.
• Construction of large Infrastructure
projects due in 2020 are currently
suspended
• E-commerce and distribution will
strengthen its position as a main driver in
the market
• Automotive and some other industries
are impacted as production is halted due
both health and supply chain restrictions
Colliers International 202025
COVID-19 & RetailCzech Republic
2.4 million m2
S/C Stock Supply
Retail Sales E-Commerce Outlook
is the total modern shopping centre stock at
the end of Q1 2020.
212,720 m2
is the current volume of modern shopping
centre space under construction or
refurbishment.
is the forecasted growth rate for retail sales
in 2020. Pre-pandemic forecast predicted
only mild decrease with 3.3%. (Source: Oxford Economics)
€220.00
is the estimated share of online sales from
total retail sales. (Source: ceska-ecommerce.cz,
18.5.2020)
• Shops are permitted to open, but with
uncomfortable hygienic measures
• The supply chain of some retailers may still
be problematic, even after the lifting of
restrictions
• Retailers will focus on e-commerce or will
collaborate to use already developed
channels
Rents
€135.00
€9.00
11.5%-4.5%
Shopping Centre
Retail Parks
High Street
*Prime headline rents per m2 / per month
Colliers International 202026
Q3 / Q4 2019
HUNGARY COVID-19Special Insights Series – Opportunities and Challenges in Extraordinary Times
Colliers International 202027
COVID-19 & EconomicsHungary
3,380 / 436
Cases GDP Unemployment
Aid Package Interest Rate Currency
is the current number of Covid-19 cases and
number of deaths in HUN as of 14th May. Source: https://coronavirus.jhu.edu/map.html
-3.1%is the current forecast of GDP growth in real
terms for 2020, down from 4.9% in 2019.Source: IMF
4.1%was the forecast in March 2020, up from 3.4%
in 2019. Unemployment will increase due to
coronavirus’s influence.Source: Oxford Economics
Enacted 0.90%is the current reference interest rate, as of
14th MaySource: MNB
%
354.18 HUFis the current value of the Hungarian Forint
against the Euro, a decline of ca. 10% since
February.Source: MNB
The government outlined rescue measures aimed
at protecting the most impacted companies and
SME-s, supporting employees, ensure solvency.
E.g.: moratorium on loans
Colliers International 202028
€122 million
Volumes TransactionsSplits by Sector
Yields
is the total commercial real estate investment
volume in Hungary for 2020 Q1. This is a 60%
decrease over 2019 Q1 volumes (€315 mln)
6
is the number of recorded transactions in
2020 Q1, resulting in an average ticket size of
ca. €20 million.
Sources of Capital
55%
#
Offices
%
5.50%
5.00%
7.00%
Offices
Retail
Industrialare the prime yields as of Q1 2020
45%Hotel
COVID-19 & InvestmentHungary
Outlook
• Hotel sector has a serious setback due to
the impact of pandemic
• Economic expansion is likely to continue
from Q3 of 2020
• The average transaction price is lower
approximately with 10 % than before the
coronavirus pandemic, even among the
core office products
41% Domestic
41% Germany
18% Israel
Colliers International 202029
COVID-19 & Offices Budapest, Hungary
3.7 million m2
Stock Supply Vacancy
Demand Rents Outlook
is the total stock at the end of Q1 2020. A
growth of 1.3% since the end of 2019.
580,000 m2
is the current volume of space under
construction (including 150,000 m2 OO). A
total of 184,000 m2 is expected to be delivered
in 2020 (including 10,000 m2 OO).
6.2%is the current vacancy rate and represents ca.
230,500 m2 of available space for let...
79,600 m2
is the gross take-up for the period Q1 2020.
Net take-up reached 46,100 m2. This result
is a slight decrease Y-o-Y.
is the current prime headline rent per m2 / per
month. Net effective rents typically range
between 20-25% below headline (including EUR
200/sqm fit-out contribution and 3-months rent-
free period) considering a 5-year lease term.*Váci Corridor office submarket
• The market is expected to remain landlord
till the end of 2020.
• Vacancy rate is expected to increase.
• The projects are affected by the availability
of materials and labour workers.
• Tenants will continue to consolidate into
single buildings, fueling competition for the
limited large blocks of contiguous space
and driving pre-leasing earlier in
the development pipeline.
€15.00-16.00*
Colliers International 202030
COVID-19 & IndustrialBudapest and its surroundings
2.3 million m2
Stock Supply Vacancy
Demand Rents Outlook
is the total stock at the end of Q1 2020. A
growth of 3% since the end of 2019.
228,000 m2
is the current volume of space under
construction.
2.8%is the current vacancy rate and represents ca.
63,000 m2 of available space for let...
79,600 m2
is the gross take-up for the period Q1 2020.
Net take-up reached 203,700 m2. This result
is an increase Y-o-Y.
€4.90is the current prime headline rent per m2 / per
month. The net effective rents continued to be
lower with approximately 5-10% than the
headline rents, especially in case of long-term
(10 years +) leasing.
• The growth rate of the industrial stock in
Budapest started to increase in 2015 -
slightly slowed down in 2019 with further
delays are expected due to the pandemic
• Rents are expected to decrease
• Investors are searching for new land
opportunities
Colliers International 202031
COVID-19 & RetailHungary
2.24 million m2
S/C Stock Supply
Retail Sales E-Commerce Outlook
is the total modern shopping centre stock at
the end of Q1 2020.
55,000 m2
is the current volume of modern shopping centre
space under construction or refurbishment. Only
one project, Etele Center in Budapest.
is the forecasted growth rate for retail sales
in 2020. This result is a 2.5 %-point
decrease Y-o-Y. (Source: FoOxford Economics
€70.00
is the estimated share of online sales from
total retail sales in Q1 2020.
• As a result of the state regulations ordering
the closure of all shopping malls, the retail
market is one of the most affected sectors
during the pandemic, with the exception of the
food industry and other essential products.
• We expect an increase in e-commerce
development in Hungary in particular
regarding food, cleaning products, medical
and pharmaceutical products.
Rents
€80.00
€40.00
9.0%2.6%
Shopping Centre
Retail Parks
High Street
*Prime headline rents per m2 / per month
Colliers International 202032
Q3 / Q4 2019
POLAND COVID-19Special Insights Series – Opportunities and Challenges in Extraordinary Times
Colliers International 202033
COVID-19 & EconomicsPoland
17,850 / 893
Cases GDP Unemployment
Aid Package Interest Rate Currency
is the current number of Covid-19 cases and
number of deaths in PL as of 14th May. Source: https://www.worldometers.info/coronavirus
-1%is the current forecast of GDP growth in real
terms for 2020, down from 4.0% in 2019.Source: Santander Macroscope
5.4%was the result quoted in March 2020, up from 5.2%
in 2019. Unemployment will increase due to
coronavirus influence on economy.Source: Central Statistical Office
EnactedThe government outlined the rescue package aimed at
supporting the economy, protecting the employees and
consumers, supporting companies, securing ample
liquidity. The total value of the programme was
estimated at PLN 312bn (EUR 68bn) (ca.15% of GDP).
0.50%is the current reference interest rate, down 50
bps as of 16th March and another decrease
down 50 bps as of 4th May.Source: Central Statistical Office
%
4.56 PLNis the current value of the Polish Zloty against
the Euro, a decline of ca. 7% since February.Source: National Bank of Poland
Colliers International 202034
COVID-19 & InvestmentPoland
€1.72 billion
Volumes TransactionsSplits by Sector
Yields
is the total commercial real estate investment
volume in Poland for Q1 2020. This volume is
210% higher than Q1 2019 (€819 million).
31is the number of recorded transactions in
Q1 2020, resulting in an average ticket size
of ca. €54 million.
6%
Sources of Capital
36%
58%percentage share of total volumes by sector
#Offices
Retail
Industrial
%
4.00%
4.55%
6.25%
Offices
Retail
Industrialare the prime yields as of Q1 2020
Outlook
• A further increase in alternative assets
investments such as student housing and
PRS, both in the capital city and other
major agglomerations.
• High interest in Polish quality assets form
Asian investors, in particular in the
industrial and office sector.
• German investors waiting for borders
opening to start new transactions in
Poland.
14%
13%
12%
8%7%6%
5%5%
4%3%3%2%
18%
Singapore UK
Germany Czech Rep.
RSA Austria
France USA
Switzerland Hungary
South Korea Philippines
other
Colliers International 202035
COVID-19 & OfficesWarsaw, Poland
5.6 million m2
Stock Supply Vacancy
Demand Rents Outlook
is the total stock at the end of Q1 2020.
A growth of 1.9% since Q1 2019.
792,800 m2
is the current volume of space under
construction. A total of around 414,700 m2 is
expected to be delivered in 2020.
7.5%is the vacancy rate at the end of Q1 2020 and
it represents 418,000 m2 of available space for
let.
138,900 m2
is the gross take-up for Q1 2020. Net take-up*
reached over 95,200 m2. This result is an 0.4%
decrease Y-o-Y.* Gross take-up excluding renegotiations
€26.00is the current prime headline rent per m2 / per
month. Net effective rents typically range
between 15-20% below headline.
• Tenants’ pressure appearing and expectations
regarding lower rental rates for the period of
official quarantine
• Withholding future lease processes, focusing
on current operations and execution of initiated
lease transactions, increasing share of
renegotiations.
• Delivery dates of office projects uc postponed
due to limitations in number of workers
allowed to work on construction site
Colliers International 202036
COVID-19 & OfficesRegional markets (Kraków, Poznań, Wrocław, Łódź,
Katowice, Tricity, Szczecin, Lublin), Poland
5.5 million m2
Stock Supply Vacancy
Demand Rents Outlook
is the total stock at the end of Q1 2020. A
growth of 6% since Q1 2019.
955,900 m2
is the current volume of space under
construction. A total of over 390,000 m2 is
expected to be delivered in 2020.
9.4%is the current vacancy rate and represents ca.
517,900 m2 of available space for let.
220,255 m2
is the gross take-up for Q1 2020. Net take-
up* reached almost 179,900 m2. This result
is an 70% increase Y-o-Y.
* Gross take-up excluding renegotiations
€13.00-16.00is the current prime headline rent per m2/per
month. Net effective rents typically range
between 10-15% below headline.
• Tenants’ pressure appearing and expectations
regarding lower rental rates for the period of
official quarantine.
• Withholding future lease processes, focusing
on current operations and execution of
initiated lease transactions, increasing share
of renegotiations.
• Delivery dates of office projects uc postponed
due to limitations in number of workers
allowed to work on construction site.
Colliers International 202037
COVID-19 & IndustrialPoland
19.1 million m2
Stock Supply Vacancy
Demand Rents Outlook
was the total stock at the end of Q1 2020.
A growth of 15.3% since Q1 2019.
2.17 million m2
was the volume of space under construction at
the end of Q1. A total of 1.1 million m2 is
expected to be delivered by the end of 2020.
7.3%was the vacancy rate at the end of Q1 and it
represents ca. 1.4 million m2 of available space
for let.
1.12 million m2
was the gross take-up for Q1 2020.
Net take-up* reached 903,500 m2. This
result is a 28% increase Y-o-.Y * gross take-up excluding renegotiations and short-term leases
€ 3.10 – 4.90is the current prime headline rent per m2/per
month. Net effective rents typically range
between 10-15% below headline.
• I&L sector to be the least negatively affected
by the global pandemic so far
• Investors looking for new opportunities and
ways to invest their capital
• Sale and leaseback transactions – attractive
financial opportunity for both investors and
companies from industrial sector
• Delaying some investments due to uncertain
situation
• A slow revival visible among tenants starting
to look for new industrial space for let
Colliers International 202038
COVID-19 & RetailPoland
12.2 million m2
S/C Stock Supply
Retail Sales E-Commerce Outlook
is the total modern shopping centre stock at
the end of Q1 2020.
440,700 m2
is the current volume of modern shopping
centre space under construction or
refurbishment.
is the forecasted growth rate for retail sales
in 2020. This result is decrease Y-o-.Y. (Source: Oxford Economics)
€ 89.00
is the estimated share of online sales from
total retail sales.
• High sales growth e-commerce.• Expected increase in vacancy rates in shopping
centres.
• Expected decrease rental rates in shopping
centres in the next few months.
• Increased footfall in small retail parks and
convenience centres but decrease in shopping
centres.
Rents
€ 120.00
€ 15.00-30.00
4.3%2.8%
Shopping Centre*
Retail Parks**
High Street*
*Prime headline rents per m2 / per month in Warsaw
** Prime headline rents per m²/per month
Colliers International 202039
Q3 / Q4 2019
ROMANIA COVID-19Special Insights Series – Opportunities and Challenges in Extraordinary Times
Colliers International 202040
COVID-19 & EconomicsRomania
16,871 / 1,107
Cases GDP Unemployment
Aid Package Interest Rate Currency
is the current number of Covid-19 cases and
number of deaths in RO as of 17th May.Source: https://www.worldometers.info/coronavirus
-3.0%is the current forecast of GDP growth in real
terms for 2020, down from 4.1% in 2019.Source: Oxford Economics
5.4%is the current forecast for the unemployment
rate in 2020, higher versus end-2019.Source: Oxford Economics
First package of measures aimed at covering
expenses related to technical unemployment,
medical leave, disbursements of late VAT
payments from state to companies, a loan
guarantee scheme for SMEs; total size stands at
RON 30bn (or 2.8% of GDP), other employment-
supportive measures expected. Under certain
conditions, bank loans payments to be frozen
(maybe for remainder of 2020).
2.00%is the current 1-week repo rate, down 50 bps
as of 20th of March (unchanged since then).Source: National Bank of Romania
%
4.84 RONis the value of the Romanian leu against the
Euro as of 15th of May, a depreciation of c.0.7%
versus end-February.Source: National Bank of Romania
Colliers International 202041
€152 million
Volumes TransactionsSplits by Sector
Yields
is the total commercial real estate investment
volume in Romania for Q1 2020. This is an
increase 23% versus Q1 2019.
8is the number of recorded transactions in 2019
(generally, worth at least €4 million), resulting
in an average ticket size of ca. €19 million.
5%
Sources of Capital
62%
27%percentage share of total volumes by sector
#Offices
RetailIndustrial
%
6.50%
7.00%
8.25%
Offices
Retail
Industrialare the prime yields as of Q1 2020
6%Hotel
COVID-19 & InvestmentRomania
Outlook
• Elevated uncertainty amid COVID-19
outbreak, with general capital outflows
(stocks + bonds) from emerging markets
suggesting a less than favourable outlook for
the likes of Romanian real estate (particularly
if current situation translated in an extended
period of economic weakness)
• High domestic RE yields versus CEE peers,
which lagged the past cycle, might support a
defensive twist to Romanian assets
26%
25%20%
12%
7%
6%4%
Greece
Romania
Czechia
Turkey
Belgium
Israel
Cyprus
Colliers International 202042
COVID-19 & OfficesBucharest, Romania
2.8 million m2
Stock Supply Vacancy
Demand Rents Outlook
is the total stock at the end of Q1 2020. A
growth of 10.8% versus a year ago.
430,000 m2
is the current volume of space under
construction. A total 199,000 m2 is expected to
be delivered in 2020.
10.25%Is the estimated vacancy rate for Q1 2020 and
represents ca. 285,000 m2 of available space
for let.
52,700 m2
is the gross take-up for the period Q1 2020.
Net take-up reached 26,700 m2, a slight
increase over Q1 2019.
€18.00is the current prime headline rent per m2 / per
month. Net effective rents typically range some
13% below headline.
• General view is that market is in stand-by
mode to see how long this situation will last,
but ongoing leasing deals are still moving ahead
• New projects with a less than ideal pre-lease
ratio may see their delivery date extended
• No significant pressures on rents as of yet
(maybe during some renegotiations), but
extended economic weakness could lead to this
Colliers International 202043
COVID-19 & IndustrialRomania
4.7 million m2
Stock Supply Vacancy
Demand Rents Outlook
is the total stock at the end of Q1 2020. A
growth of ca. 10% since the end of Q1 2019.
400,000 m2
is the current volume of space estimated to be
under construction. A total 500,000 m2 was
expected to be delivered in 2020 before
COVID-19 outbreak.
6.0%Was the vacancy rate in Q1 2020 and
represents ca. 280,000 m2 of available space
for let.
66,400 m2
is the gross take-up for the period Q1 2020.
This is a 43% decrease over a year ago.
€3.9-4.0is the current prime headline rent per m2 / per
month. Net effective rents typically range
between 12-17% below headline.
• Market participants in wait-and-see, with some
tentative interest from some players to sign
new deals in Q3-Q4 provided more clarity on
current issues
• Opportunities for online-related players
• Some new deliveries may be delayed, but they
are not being cancelled
• Some pressures for lower rents or other
arrangements during this period of closure
Colliers International 202044
COVID-19 & RetailRomania
4.0 million m2
S/C Stock Supply
Retail Sales E-Commerce Outlook
is the total modern shopping centre stock at
the end of Q1 2020.
320,000 m2
is the current volume of modern shopping
centre space under construction or
refurbishment.
is the forecasted growth rate for retail sales
in 2020. (Source: Oxford Economics)
€n/a
is the estimated share of online sales from
total retail sales.
• Shopping centers closed as of 23rd March.
Shops with an exterior entry (so etail parks)
opened as of mid-May, malls - maybe in June.
• State laws passed favouring smaller tenants
in rent negotiations
• Online sales (particularly for food and various
household items) booming
• Outlook for consumption dependent on
duration of current crisis/lockdown, but
March retail figures somewhat encouraging
Rents
€70.00
€15.00
9.8%2%
Shopping Centre
Retail Parks
High Street
*Prime headline rents per m2 / per month
Colliers International 202045
Q3 / Q4 2019
SLOVAKIA COVID-19Special Insights Series – Opportunities and Challenges in Extraordinary Times
Colliers International 202046
COVID-19 & EconomicsSlovakia
Currency
€Slovakia adopted the Euro currency in 2009
1,477 / 27
Cases GDP Unemployment
is the current number of Covid-19 cases and
number of deaths in SK as of 14th May.Source: https://www.worldometers.info/coronavirus
-7.2%is the current forecast of GDP growth in real
terms for 2020, down from 2.3% in 2019.Source: National Bank of Slovakia
7.7%is the current forecast for the unemployment
rate in 2020, up from 4.9% in 2019.Source: National Bank of Slovakia
Aid Package EURIBOR 3M
ProvidedThe European Commission has approved a €2 billion Slovak
aid scheme for preserving employment and supporting self-
employed individuals affected by the coronavirus outbreak
and the emergency measures taken by the State. Support
includes measures in the forms of business loans,
postponement of tax, household and salary allowances,
postponement of the mortgage payments, etc.
-0.245%is the current EURIBOR 3M rate as of 12th May,
up 0.003% compared to 12th April.Source: Euribor-rates.eu
%
Colliers International 202047
€170.54 million*
Volumes TransactionsSplits by Sector
Yields
is the total commercial real estate investment
volume in Slovak Republic for Q1 2020. This is
a 125% increase over Q1 2019 volumes (€75.80
ml)
4*is the number of recorded transactions in Q1
2020, resulting in an average ticket size of ca.
€56.85 million.
Sources of Capital
percentage share of total volumes by sector
#
88% Office
%
5.75%
5.50%
6.35%
Offices
Retail
Industrialare the prime yields as of Q1 2020
12%Industrial
COVID-19 & InvestmentSlovakia
Outlook• In the first quarter of the year, the effects of the
COVID-19 pandemic were limited, whereby most of
the ongoing transactions were continuing;
• We expect the sectors most affected by the
restrictive measures (retail and offices segments) to
experience increase in yields. Whilst some of the
industrial subsectors, such as just-in-time delivery
and e-commerce are forecasted to stay stable;
• In terms of the deal types, we expect to see more
sale-and-lease-back transactions.
*Excluding pending and confidential transactions
12%
35%
53%
APAC
CEE
EMEA
Colliers International 202048
COVID-19 & OfficesBratislava, Slovakia
1.8 million m2
Stock Supply Vacancy
Demand Rents Outlook
is the total stock at the end of Q1 2020. A
growth of 2.5% since Q1 2019.
334,609 m2
is the current volume of space under
construction. A total of 86,789 m2 is expected
to be delivered in 2020.
8.6%is the current vacancy rate and represents ca.
158,107 m2 of available space for let.
15,813 m2
is the gross take-up for Q1 2020. Net take-
up reached 25,776 m2. This result is 16%
decrease Y-o-.Y
€17.00is the current prime headline rent per m2 / per
month. Net effective rents typically range
between 5-15% below headline.
• Office tenants are currently slowly adapting the
strategies to come back to the office buildings;
• Government restrictions stimulated office tenants
to seek additional incentives, such as rent
reductions/holidays. Some of the landlords do
offer additional rent-free periods in exchange of
the prolongation of the lease term. Should this
trend continue, we can expect an increased
number of renegotiation transactions in the
upcoming quarter.
Colliers International 202049
COVID-19 & IndustrialSlovakia
2.6 million m2
Stock Supply Vacancy
Demand Rents Outlook
is the total stock at the end of Q1 2020. A
growth of 13.8% since the end of 2018.
227,576 m2
is the current volume of space under
construction. A total of 94,000 m2 is expected
to be delivered in 2020.
7.18%is the current vacancy rate and represents ca.
120,000 m2 of available space for let.
43,685 m2
is the gross take-up for Q1 2020. Net take-
up reached 38,831 m2. This result is 21%
decrease Y-o-.Y
Warehouse: €4.20
Logistics & Distribution: € 3.80
are the current prime headline rents per m2 /
per month. Net effective rents typically range
between 7-10% below headline, depending on
developer, location and terms of contract.
• Restrictive measures adopted by the Slovak
government to tackle COVID-19 pandemic had an
uneven effect on the industrial players. While
automotive producers, manufacturing and their
supply chain faced closures, resulting in an
increased caution over future and existing rental
contracts, as well as the need to reassess expansion
plans, B2C logistics sector faced substantial
increase in demand, further strengthening a position
of e-commerce.
Colliers International 202050
COVID-19 & RetailSlovakia
1.2 million m2
S/C Stock Supply
Retail Sales E-Commerce Outlook
is the total modern shopping center stock at
the end of Q4 2019.
201,690 m2
is the current volume of modern shopping
center space under construction or
refurbishment.
is the forecasted growth rate for retail sales
volume index in 2020 (2015=100). This
result is 7.7% increase Y-o-.Y. (Source: Oxford
Economics)
€35.00
is the estimated online commerce revenue
share of companies in 2017. (Source: Statista)
• The loss of sales for retail players is expected to
translate into an inability to make regular rental
payments (particularly for SMEs)
• Unfavourable revenue situation, affecting rental
payment flows, may in turn result in the inability
of landlords relying on bank financing schemes to
repay loans
• Disruptions in construction process resulted in
delays in the delivery schedule for some of the
pipeline projects.
Rents
€45.00
€9.00
22%7.4%
Shopping Centre
Retail Parks
High Street
*Prime headline rents per m2 / per month
Colliers International 202051
Luke DawsonManaging Director | CEE+420 606 725 [email protected]
We are here to help.
Kevin TurpinRegional Director of Research | CEE+420 606 725 [email protected]
This report gives information based primarily on Colliers International data, which may be helpful in anticipating trends in the property sector. However, no warranty is given as to the accuracy of, and no liability for negligence is acceptedin relation to, the forecasts, figures or conclusions contained in this report and they must not be relied on for investment or any other purposes. The outbreak of the Novel Coronavirus (COVID-19), declared by the World HealthOrganisation as a “Global Pandemic” on the 11th March 2020, has impacted market activity in many sectors, creating an unprecedented set of circumstances on which to base a judgement. This report does not constitute and must notbe treated as investment or valuation advice or an offer to buy or sell property. Given the unknown future impact that COVID-19 might have on real estate market supply, demand and pricing variables, we recommend that you recognisethat our research and analysis is far more prone to market uncertainty, despite our endeavours to maintain our robust and objective reporting.