Despite the fact that national governments and European institutions «have already been working to develop measures to support stability and economic recovery », the 16 associations of the sector - EPRA, RICS, NREV, GRESB, CREFC Europe, AREF, ASPIM, Confindustria Assoimmobiliaare, British Property Federation, European Council of Shopping Places, FastighetSagarna, Irish Institutional Property, IPF, IVBN, RAKLI, ZIA – remarked that there are important vectors within the sector which should be taken into account when it comes to drawing out policies and establishing support measures.
One of the issues the associations consider to be important concerns the integration of buildings in the cities. «Measures should recognise that the real estate that makes up the heart of our towns and cities is inextricably interconnected through its owners to insurance companies, pension funds and the banking system and therefore, ultimately, investments of the greater public and they should support the integrity of that interconnectedness», it can be read in the release issued this Tuesday.
On the other hand, measures should also «create incentives for landlords, lenders, investors and tenants to work together so none is forced to bear the full impact of the current crisis and so all will be in a position to contribute to both economic recovery and European financial and social stability more generally».
Afterwards, these should also «be time-limited although recognising that many businesses will likely take some time to recover», and «should be implemented quickly, particularly those targeting businesses that have little financial resilience and mounting liabilities».
For the creation of these measures, the associations consider that they should «complement» those already implemented, «through improved cross-border investment possibilities in real estate stabilising national economies across Europe and to facilitate a resilient and sustainable economic recovery».
Real estate is one of the European economy’s motors
On the same note, the associations further remarked that the real estate is, therefore «a major contributor in addressing two critical challenges of our time: providing liveable and functioning cities for a growing urban population, including offering work and office space for businesses of all sizes, and reducing the environmental footprint of the built environment».
And it should not be forgotten that the real estate sector is also «an important catalyst for job creation». The most recent available figures show the commercial real estate industry directly employs 4.0 million people and contributes 385 billion euro to the European economy annually. Annual investment in new commercial buildings and the refurbishment and development of existing buildings in Europe typically averages around 250-300 billion euro and represents 10% of total investment in the economy.
Investment in housing, other buildings and infrastructure is also substantial, and together with commercial real estate, totals approximately 1.3 trillion euro annually, which is almost two-thirds of capital investment in the European economy. «The challenges following the pandemic will undoubtedly accelerate the need for such investment over the coming years», they highlighted.
Real estate also plays a key role when technological and cultural developments affect the way that our society works. Over the last decade, as shopping has increasingly moved online and away from high streets and shopping centres, owners of commercial real estate have developed the large warehouses that are replacing shops and started the huge task of repurposing parts of the high street. The Covid19 crisis has accelerated these profound changes in the high street, the centre of our towns, and the commercial real estate industry will play an important part in post-crisis recovery and town centre regeneration, so important to societal morale.