While it is going to be hard to say who the biggest losers are going to be from the coronavirus outbreak, it is already becoming clear that the hotel sector is being particularly savaged. The latest reading from the quarterly Deutsche Hypo Index, which measures sentiment in the German real estate market, shows the hotel sector touching a historic low.
The Index reading for March was 115 points, down 3.8% on its February score of 119.6 points. That in itself had been down only modestly (down 1.3%) on the January reading. What stood out in the overall negative March reading, overall the 147th in the index’s history, were two asset classes - hotels and offices.
The hotel component of the index, which measures both actual economic results as well as market participants’ expectations based on a variety of real-life economic indicators, crashed by 10.5% to a record historic low of 100.5 points.
Offices, by contrast, held out against the wave of negative sentiment and remained stable at 140.3 points, making the asset category the clear leader as an investment option.
Residential followed hotels downwards, falling 9% to 127.9 points, marking its lowest point since November 2009, in the depths of the financial crisis. This places the asset category residential behind logistics, which fell 3.5% in investors’ favour over the month, to 131.3 points. Holding up the table, however, as the least favoured category was retail, which plunged again by 5.8% to land by a miserable 65.8 points.
