• real estate market has defended itself against the COVID-19 pandemic
  • temporary fluctuations in real estate sector have not translated into investors’ behavior
  • commercial and diversified space market noticed largest decreases in profitability
  • housing market noted higher profitability in the end of 2021 than before COVID-19 pandemic
The COVID-19 pandemic period brings huge uncertainty, especially for the real estate sector. On the one hand, restrictions on the mobility of a population, decline in travel demands, popularization of remote work and education models caused doubts among investors questioning the future of the sector and the functions of real estate. On the other hand, the large supply of cash after the first waves of the pandemic and the upcoming increase in inflation resulted in many investors boldly investing cash in real estate, considering them as assets of stable value. This research aims to analyze the processes of value migration among real estate companies listed on the Warsaw Stock Exchange during this turbulent process. We analyzed the changes in the main drivers of value and the migration rates of the real estate sector based on data for 2018, 2019, 2020 and Q3 2021. The first period of the pandemic is the time of the collapse of the main profitability factors, sales and profitability of sales decline in the entire sector. However, the financial pillars of the analyzed companies are stable and we are not seeing signs of liquidity problems or a significant increase in debt. The second year of the pandemic is a significant reflection of most of the drivers of value, often to levels higher than those observed before the pandemic. Investors seem to remain insensitive to turbulent changes in accounting measures of effectiveness. We observe the relative stability of market measures. The processes of the migration of values from and to the sector do not show significant changes when comparing the periods before and during the pandemic. We observe various intensities of the studied phenomena in various groups of the real estate segment.
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