Quarterly Report Q2-2020
Euro Score down overall – positive trend at end of the quarter

Dear readers,

After 34 multifaceted and successful years at the NORD/LB Group, I am shifting my activities from Hanover to Hamburg, where I will be taking on new challenges at DZ HYP starting in January 2021. Many thanks go out to all of you for all your support of the Deutsche Hypo REECOX over the years. My fellow Member of the Board of Managing Directors Andreas Rehfus will be taking my place. As part of the shift, he will also be taking over the responsibility for commenting on the Deutsche Hypo REECOX. I wish you all the best in the future!


Kind regards,


Your Sabine Barthauer

Contact

Ms Sabine Barthauer
Member of the Board of Managing Directors

Dear readers,

The coronavirus pandemic is a huge challenge for the real estate sector, as in other areas. After a significant decline in the Euro Score in the first quarter, an increasingly positive trend was noted at the end of the second quarter. Still, it is too early to make solid forecasts about the long-term effects. It remains to be seen where things will go from here.


Your Andreas Rehfus

Contact

Mr Andreas Rehfus
Member of the Board of Managing Directors

Euro Score down overall – positive trend at end of the quarter

In the first quarter of 2020, the Euro Score was dominated by the effects of the coronavirus pandemic, posting a decline of 9.4 % in all – the sharpest drop since the 2008 financial crisis. Across almost all of the countries monitored by REECOX, the second quarter started out in April with the steepest decline. Germany was an exception, having passed the peak back in March. Overall, the Euro Score lost 10.7 % that month. There was a modest positive trend in May, which saw a gain of 2.4 %, followed by a marked improvement in the overall economy in June, with growth at 5.0 %. Overall, the Euro Score lost about 4.0 % quarter on quarter.

REECOX Eye Q2-2020

Deutsche Hypo Euro-Score

204.6

Germany leads, subdued development in UK and Poland

In retrospect, the huge impact of the coronavirus crisis on the REECOX Germany, which already occurred in March, turns out to have been premature. The German real estate sector was the only one of the real estate markets monitored by REECOX to close the second quarter with a gain (+3.4 %). While the decline in most of the other real estate markets was less sharp in the second quarter compared to the first, the negative trend intensified in the UK (Q1: -6.8 %, Q2: -11.0 %) and Poland (Q1: -6.7 %, Q2: -7.6 %) in the second quarter. In both cases, it should be borne in mind that the decline in the first quarter was below average because restrictions to fight the pandemic were put in place later in those countries. The United Kingdom has experienced the sharpest decline due to the impact of the pandemic since the start of the year, at 17.5 % (average -14.0 %).

Change of Input Parameters and Real Estate Economic Situations
Δ Q2-2020 / Q1-2020

Country

Stock Index

Real Estate Economy Index

Economic Indicator

Base Interest Rate

Interest Rate 10-Year Government Bonds

REECOX Q1-2020 / Q2-2020
DE
upup
upup
dodo
eq
up
up
GB
upup
up
dodo
eq
do
dodo
PL
upup
up
dodo
dodo
dodo
dodo
NL
upup
up
dodo
eq
eq
dodo
FR
upup
do
dodo
eq
eq
dodo
ES
up
up
dodo
eq
eq
dodo