Office buildings in central Europe are vacant and shopping malls and high streets are deserted, but the largest landowners remain afloat during the Covid-19 pandemic thanks to robust central bank bond purchases backed by real estate debt.
Some worry that the policy is covering up the long-term pain should employees and customers never return to their pre-coronavirus numbers.
Shares in Unibail Rodamco Westfield SE, one of Europe’s largest commercial real estate investment funds and owner of shopping centers, offices, hotels and exhibition centers, are down more than 50% from last year.
However, Unibail’s debt holds up well. The yield on a 5-year bond issued by the real estate development activities was 1.67% on Tuesday, more than a full percentage point lower than a year earlier. The European Central Bank last bought bonds issued by Unibail in the week of January 8, according to public documents.