In a telephone interview on Friday, Evan Lazar, co-chairman of the global real estate group who leads over 1000 real estate specialist lawyers worldwide, said new investments were generally being pursued by long-term real estate clients.

The deals they are pursuing continues the “beds and sheds” theme of 2019, except hotels for which there is now a lot of caution, Lazar added.

Pawel Debowski, co-chairman of Dentons’ European real estate group, said in the same interview that new transactions had commenced amid the pandemic. He stated that almost all sectors (except for hotels) remained active, including residential-for-rent, student housing, office and logistics. He is currently progressing deals for student housing, plus a single-country and a multi-country office portfolio, as well as build-to-suit forward logistics purchases.

He is also aware of an example of a renegotiated transaction in the CEE region with a small discount due to a material change in the asset.

Mid-term expectation of price stability
Debowski said he expected pricing discussions to take place between investors and developers. However, he does not expect ‘too much’ discussion with respect to core assets in any sector. He also believes that on the other hand, a consensus among developers is that in the mid-term, prices of commercial real estate will remain stable.

This is if real estate is used as a hedge to inflation as it so often is. Some financial investors and analysts doubt inflation will be ignited by the foreseen injection of $5 tln (€4.56 tln) of government-led financial stimuli. However, others believe inflation will take off, and that will become a driver for real estate investment.

Debowski also believes that, contrary to common belief and ongoing discussions, the crisis shows that for larger organisations, home offices will not work as a concept and that people will want to return to their offices or workplaces. The pandemic could even result in the introduction of regulations disallowing high-density, open-space layouts, he contemplates. Both those factors may increase demand for office space in the near future.

Globally, Lazar summarised that it was a ‘mixed bag’; some transactions had been placed on hold while new instructions were being received.

Solidarity
The firm has not only been busy on usual transactional work but also on supplying non-legal information. Colleagues in Asia have shared with European counterparts how some landlords in countries such as Singapore had been offering relief measures to tenants. This in turn has been filtered to European real estate clients to learn from.

‘The stance we are taking is one of solidarity,’ said Lazar. ‘Solidarity and working together to help people get through this whole period.’