Europe’s downtown office buildings are empty, and malls and main streets are deserted, yet the biggest landlords are staying afloat during the Covid-19 pandemic thanks to robust central-bank buying of bonds backed by property debt.
Some worry that the policy is obscuring long-term pain should workers and shoppers never return in their pre-coronavirus numbers.
Shares in Unibail Rodamco Westfield SE, one of Europe’s largest commercial real-estate investment trusts and the owner of malls, offices, hotels and exhibition centers, are down by more than 50% from this time last year.
Unibail’s debt, however, is holding up fine. The yield on a 5-year bond issued by its real-estate development business was at 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 Jan. 8, according to public filings.