Europe’s downtown office buildings are empty and malls and main streets are deserted, but the biggest landlords stay afloat during the Covid-19 pandemic thanks to solid purchases by the central bank of bonds backed by real estate debt.
Some fear the policy will obscure the long-term pain if workers and buyers never return to their pre-coronavirus numbers.
Shares of Unibail Rodamco Westfield SE, one of Europe’s largest commercial real estate investment funds and owner of shopping malls, offices, hotels and exhibition centers, are down more than 50% compared to the same period last year.
Unibail’s debt, however, is holding up well. The yield on a 5-year bond issued by its property development business was 1.67% on Tuesday, more than a 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.