Prof. Dr. Felix Schindler, Head of Research & Strategy, HIH Invest
“By maintaining the key interest rate level, the ECB is confirming market expectations. It is still too early at this point in time to raise key interest rates in response to the escalation in the Middle East and its effects. On the one hand, the data situation is still not very reliable and, on the other hand, possible second-round effects with regard to inflation and growth developments in the coming weeks must also be kept in mind and analyzed.
Likewise, the duration of the conflict in the Middle East cannot be adequately estimated at present. Accordingly, the extent of the medium- to longer-term effects on the global economy, global supply chains, energy markets and, last but not least, inflation developments is difficult to predict. However, the probability of a key interest rate hike by the ECB in the coming months has increased significantly; the capital markets have already reacted with a significant increase in long-term yields.
The development of long-term capital market returns will also be of decisive importance for liquidity and market activity on the real estate and financing markets in the foreseeable future. In order to ensure stable cash flows, the selection and identification of cyclically resilient types of use as well as high-quality properties with tenants with strong credit ratings in markets with excess demand will become even more important for investors in this environment.”
