Bicycles in Graz, Austria

Nineteen Motley Real Estate Ideas in Times of COVID-19

By Helmut Seitz and Nadja Holzer, HSP Rechtsanwälte GmbH

The coronavirus has got the world of real estate investment thinking about how to set sail when aiming at long-term success in the industry. Continuing our series on “outsidethe- box” investment ideas, in this issue, we turn our attention to commercial real estate.

While residential real estate has become an even more sought-after investment since the outbreak of the pandemic, a differentiation must be made with commercial real estate. The investment volume in this industry has collapsed by approximately 25%, Europe-wide. A return to pre-crisis levels is not expected until the end of 2022—time enough to think about investments in commercial real estate!

Idea No. 1: Supermarkets in Multifunctional Buildings

Many branches of the retail sector have been, and are being, hit hard by the pandemic due to governmentordered closures and restrictions. Food retailers are spared from lockdowns due to their essential supply services. This fact alone is a valuable plus point when considering such an investment. Single-storey supermarkets with extensive car parks, however, are not very sustainable. They waste valuable land and lead to increased motorised individual mobility, as customers will use their cars to buy groceries despite having to travel only short distances.

There is therefore a noticeable trend towards multifunctionality. Land prices are rising, and affordable housing is becoming scarce in metropolitan areas. In Vienna, Austria, a supermarket chain is currently constructing a building with 65 social housing flats instead of just a single-storey supermarket. Extending this trend to rural areas will be crucial for future investments.

Idea No. 2: DIY Stores

The pictures of people queuing to shop at DIY stores after the first lockdown in Austria went through all the national media. When investing in commercial real estate, it is important to choose the right industry. Even before the corona crisis, DIY market real estate was in high demand. A look at Germany is worthwhile, simply because the market is bigger. Deals in this context are dominated by institutional investors who invest in DIY stores with strong and well-known operators. The corona pandemic has confirmed the success of this, so far, conventional investment. However, those who want to get an idea of the sector can do so; for example, through buying shares in the German DIY chain of HORNBACH-Holding-AG.

Idea No. 3: Stores Specialising in Bicycles

Sustainability is a key factor when investing responsibly in commercial real estate. Many small retailers have been swept up in the corona pandemic by the ever-increasing power of online retail. For small shops in particular, success lies more than ever in the careful selection of their products. Bicycle shops are a classic example. The Austrian state endeavours to expand its bicycle infrastructure this year, and even more so in the coming years. So why not follow this future-oriented trend as a private investor and focus on investments in bicycle retail to promote awareness and sustainability?

Idea No. 4: Delivery Reinvented 

As the pandemic has clearly demonstrated, retail cannot survive without online trade. The ways in which online retail will grow and expand in the near future is secondary. All you need to know is that logistics centres are and will be more in demand than ever before. Postal and parcel services see a considerable and consistent upward trend in their deliveries, which is expected to continue in the years to come.

In times of crisis, there are many more opportunities that can keep us busy in the realms of real estate investment. More on that in our next issue, so stay tuned!


Helmut Seitz

Helmut Seitz

GGI member firm
HSP Rechtsanwälte GmbH
Law Firm Services
Vienna, Austria
T: +43 1 533 0533
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W: hsp.law
Nadja Holzer

Nadja Holzer

GGI member firm
HSP Rechtsanwälte GmbH
Law Firm Services
Vienna, Austria
T: +43 1 533 0533
E: This email address is being protected from spambots. You need JavaScript enabled to view it.
W: hsp.law


Published: GGI Insider, No. 111, January 2021 l Photo: xbrchx - stock.adobe.com

 

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