Jump to:
Episode 2: Nonfinancial Companies: Slow economic recovery continues to strain credit quality

Overview

The aftermath of the coronavirus pandemic will impact real estate companies for some time to come – or not? Looking at operating- and financial performance of rated Nordic real estate companies, the impact so far is barely visible. It seems that companies may come out of the pandemic largely unscathed.

We believe, businesses will not go back to the way they operated before. Real Estate companies will use the crisis to reinvent themselves and increase their resilience, adapting their models and operations to the ”new normal”. However, building resilience needs to consist of much more than reopening workspaces and a return to pre-crisis strategies. Rather, companies should prepare for a slow re-entry and a choppy and multi-phased recovery.
For Sweden’s property market, which continues to benefit from healthy transaction volumes and still low though volatile interest rates, the pandemic’s longer impact remains uncertain. The macroeconomic environment weakened significantly in the second quarter of this year but has undergone a solid recovery since the summer.

The pandemic will produce winners and losers as it affects both demand and supply. It has also raised questions over how we work that is likely to affect demand for offices in future. We expect existing structural shopping trends to gather speed as a result of digitalisation and the rise of e-commerce, among other factors, which is in turn creating tailwinds for logistics assets.

With such factors in play, will the pandemic mark the beginning of the end of the current real estate cycle? And how much time do real estate companies have to prepare for the inevitable cooling of sector conditions?

The Riksbank has announced that it will purchase corporate bonds to support low funding costs and reinforce the capacity to act if credit supply for nonfinancial corporates deteriorates. The programme began in September. Will it prove a powerful tool to support sufficient liquidity in the secondary market if investor sentiment turns sour?

Day 2
The Swedish real estate sector in a European perspective; bond markets and peers
Agenda highlights:

  • In terms of credit quality, what are the differences between and the relative strengths and weaknesses of Swedish/Nordic and European real estate companies from an investor perspective?
  • The Nordic countries, and Sweden in particular, will outperform Europe in terms of economic growth this year because they have largely avoided shutdowns during the coronavirus crisis. Are the Nordic markets therefore more attractive from a bond investor perspective?

Day 2
The Swedish real estate sector in a European perspective; bond markets and peers
Agenda highlights:

Guest Speakers

Charles Watford
Vice President and Credit Analyst

Guest Speaker

Pimco Europe Ltd

Guest Speaker

Pimco Europe Ltd

Vice President and Credit Analyst
Charles Watford
Helena Frisk
Portfolio Manager Credits – Fixed Income

Guest Speaker

Swedbank Robur Fonder AB

Guest Speaker

Swedbank Robur Fonder AB

Portfolio Manager Credits – Fixed Income
Helena Frisk

Moody's Speakers

Anke Rindermann
Associate Managing Director -
Corporate Finance Group

Moody's Investors Service

Moody's Investors Service

Corporate Finance Group
Associate Managing Director -
Anke Rindermann
Oliver Schmitt
Vice President – Senior Credit Officer
Corporate Finance Group

Moody's Investors Service

Moody's Investors Service

Corporate Finance Group
Vice President – Senior Credit Officer
Oliver Schmitt
Maria Gillholm
Vice President – Senior Credit Officer,
Corporate Finance Group

Moody's Investors Service

Moody's Investors Service

Corporate Finance Group
Vice President – Senior Credit Officer,
Maria Gillholm