The stock market is subject to enormous fluctuations due to the pandemic. What impact does Corona have on investments in the real estate sector?
Real estate is still one of the most popular investments in Germany. This is due, among other things, to the fact that they are very stable in value and allow for stable returns especially in times of crisis. Of course, there are many factors that are relevant at the level of an individual investment, such as the property segment, the location, the rental and much more. The global pandemic was not foreseeable and has in some cases had a significant impact on the real estate sector. While the hotel industry, for example, is suffering greatly from the travel restrictions, the residential and office segment has so far been largely unaffected. While stationary trade is suffering, real estate for logistics is booming. Basically, a mixed portfolio of high-quality properties in good locations offers significantly greater stability than, for example, high-yielding real estate investments such as project developments. That is why we decided even before the crisis to focus exclusively on premium portfolio properties at Bloxxter.
What makes real estate a crisis-proof investment?
Real estate is rightly known as particularly crisis-proof. With hardly any other investment is there such an obvious value behind it as with real estate. Completely independent of market developments and short-term trends, the location of the - as the name suggests - property remains unchangeable. The same applies to the building fabric. So if I focus my investments on premium real estate and a sensible diversification of my investments, my returns are very stable even in times of crisis. This long-term predictability offers a security that investors seek especially in uncertain times. Not without reason, almost all large fortunes in Germany are based on a mix of entrepreneurial investments, such as shares and real estate as an anchor of stability for uncertain times.
How can investors invest in digital securities with Bloxxter?
We founded Bloxxter with the aim of consistently focusing on the customer. This applies to the quality of the investments on the one hand, but also to the standards and processes on the side of the real estate itself, and of course to the investment process as such. In the past, investments in real estate were usually very complex. In the case of funds, for example, personal consultation with an agent was necessary, incomprehensible prospectuses and meaningless advertising material were the rule. In addition, cumbersome documents and sometimes identification via the so-called Post-Ident procedure were part of the process. A rather lengthy process with several appointments. We have fundamentally changed that. Our goal was to get as close as possible to the target image: Participating in a property can be as easy as buying a pair of sneakers. We have come close. With us, anyone from anywhere can invest in just a few minutes. Simply select the desired amount, place it in the shopping cart, enter your name and email address - and you're done. Identification also works digitally via app and takes less than five minutes. So everything is very convenient.
What are the advantages of investing with Bloxxter?
Investors benefit from various aspects with Bloxxter. The bottom line is that I would say our biggest advantage for clients is our standards. We all have a lot of experience, every single one of us has been working in the respective field for over 20 years. So we know exactly what professional investors such as pension funds and insurance companies look for in their investments. We consistently implement these standards. We no longer want two-tier investments, where private investors only get what institutional investors don't want. That is why we only offer premium real assets - starting at 500 euros. But our digital implementation is not only convenient for clients, it also reduces costs considerably and thus ensures that we pay out an attractive fixed return of 3%. This is significantly more than other fixed-income investments and most open-ended real estate funds. The daily transferability of the securities rounds off our investment and makes it an anchor of stability for almost any portfolio.
An outlook: How will the real estate market develop in the next few years?
On a macro level, I assume that the pandemic will lead to an overall dampening of growth. But of course the effects will again be very different depending on the segment and location. In the premium segment of office / logistics and residential I expect hardly any or positive effects. For business travel, hotels and decentralised retail, on the other hand, the effects will be very noticeable and for a very long time. The price development in the city centres of the metropolises is supported by a high demand for modern office space, which leads me to expect only a moderately rising vacancy base. In contrast, mediocre properties in peripheral locations may experience prolonged growth losses. That's why I would always recommend private investors in particular not to make any compromises on quality in order to achieve a minimally higher return - this is always accompanied by a corresponding risk.
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