The tenant mix of open-ended real estate funds is so risky

The question of which sectors tenants make up open real estate funds is becoming increasingly important. While individual industries have seen virtually no losses in the wake of the COVID 19 crisis, many other industries face some existential challenges.

The state lockdown measures hit one or the other industry with full force, such as the retail trade or the catering trade. Both sectors can also be found in the tenant mix of open-ended real estate funds, which manage assets with a total value of more than EUR 500 billion. For this reason, the real estate portfolios are faced with increased risks.

Rating agency Scope gives the all-clear

In the “Open Real Estate Funds 2020” study, the rating agency Scope also analyzed the tenant mix of the funds and assessed the risks of the individual sectors. There are focal points with regard to the sectors in the composition of the funds, but the tenant mix is ​​sufficiently differentiated. The five sectors are particularly relevant for the rental income of open-ended real estate funds:

  • Retail consumer goods without food with 12 percent
  • Banks and financial services with 11 percent
  • Business, legal and tax advice with 11 percent
  • Textile retail with 10 percent
  • Hotel and tourism with 10 percent

Low-risk areas cover almost half of the rental income

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Scope regards the origin of just over 45 percent of rental income from open-ended real estate funds as low-risk or only slightly affected by COVID-19. These include, for example, public or state institutions, food retailing, healthcare, apartments or banks. This contrasts with the strong impairment of the stationary retail trade, the hotel and tourism industry. Shopping centers in particular should therefore be prepared for the fact that tenants can implement price reductions or in some cases even fail. However, Scope considers the losses in the hotel and tourism industry to be only temporary and anticipates normalization for 2022.

Image sources: Arsenie Krasnevsky /

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