RCA Insights

First Signals on Deal Activity Amid Virus Disquiet

By on March 13th, 2020

How is the coronavirus pandemic affecting transaction activity? That is the question commercial real estate market participants globally are asking Real Capital Analytics amid unprecedented current events.

Firstly, we should recognize that the time it takes to purchase real estate directly means that there is a structural lag: deals closing in the first quarter of 2020 will have started in the fourth quarter of 2019 or even earlier. That means it may take time for the current dislocation to impact transaction activity.

The phenomenon of COVID-19 is more recent in Europe and the Americas than it is in Asia Pacific. This is reflected in the charts above, which show cumulative activity recorded in the first eight full weeks of 2020 versus the same periods in 2018 and 2019.

Data indicates that for the first eight weeks of 2020, European activity is off 18% compared to 2019 and in the Americas deal volume is 10% higher. In Asia Pacific activity is 50% lower. (February deal volume data is a preliminary reading.)

Many of the networking events cancelled across the globe (such as MIPIM) have traditionally kicked off the sale processes and it remains to be seen how the curtailment of face-to-face meetings between brokers, buyers and lenders will impact transaction activity. We expect any disruption to be recognized in second quarter numbers in Europe and the Americas.


Data analysis by Beatrice Ginieis

Simon Mallinson

Managing Director, MSCI Research

Simon heads MSCI’s global real estate research team. Most recently, he led the global analyst group at Real Capital Analytics, which MSCI acquired in late 2021. Previously he led European research at Invesco Real Estate and also worked at IPD, which became part of MSCI in 2012, establishing the firm’s first North American office. Simon is a member of the Royal Institute of Chartered Surveyors and holds a master’s degree in Real Estate Development from the University of Manchester and a bachelor’s degree from the University of Leeds.