Investors in Brookfield Real Estate Partners (NASDAQ: BPY) this could not have happened: the shares of the property management company crashed shockingly to 50.6% in March, according to data provided by S&P Global Market Intelligence.
Brookfield provided its first COVID-19 update, or precisely how the pandemic could affect its business, on March 20. The stock, however, had already been in freefall since then, as fears of blockages of coronaviruses on the various properties owned by the company investors were feared.
Brookfield has approximately $ 200 billion in assets under management and manages over 450 million square feet of property, primarily in the office, retail, family and hospitality sectors. In March, many shopping malls, restaurants and offices cut working hours or closed when stricter blockades were imposed.
Brookfield owns a huge share of office and retail property, with the core office contributing nearly 70% of its net income in 2019. However, what worries the market is the other part of Brookfield’s business. : its main retail portfolio which includes shopping malls, restaurants and entertainment properties. The COVID-19 pandemic only reinforced the narrative of the retail apocalypse, triggering fears that many brick and mortar stores may not survive the blocking effect as more customers flock to the comfort of online shopping and remain loyal.
Brookfield Property has parental support Brookfield Asset Management (NYSE: BAM), which is a great advantage to have in such difficult times. Brookfield Asset Management itself issued a statement last month, highlighting its liquidity position to convince investors of its ability to weather the storm.
That said, Brookfield Property’s business line is among those that could be seriously affected due to the repercussions of the coronavirus, which is why investors’ fears seem justified even if the stock has gone down too, too quickly.