Economic slowdown affecting rental income. Restricted transaction volumes lead to earnings compression. Nevertheless, an increase in earnings is possible in the medium term.
Swiss Life Asset Managers observes ongoing investor demand for real estate investments. However, the current scarce supply limits transaction volumes and is impacting short-term earnings.
The current economic slowdown is reflected in lower tenant demand. The resulting reduction in rental income affects property and portfolio performance.
Swiss Life Asset Managers also believes that investing activities are influenced by increasing regulation density. This applies not only to the residential sector, where growth conditions are hampered, among other things, by regional rental caps.
A change in consumer behaviour, such as home delivery of food or meals, is likely to reduce the space required by traditional restaurants and supermarkets. Despite these structural risks, Swiss Life Asset Managers expects higher acquisition yields in the medium to long term.