A First Look at the Impact of the COVID-19 Pandemic on Spanish REITs

This study analyses the impact of the COVID-19 pandemic on Spanish listed REITs during the first wave from both the stock market and the operating performance perspectives. First, we find that the Spanish stock market for REITs reacts with less intensity and later than the rest of the Spanish and worldwide REIT indexes. Moreover, we observe a significant negative abnormal return of our REIT index when the pandemic was declared (11 March 2020). This significant negative abnormal return extends during lockdown but becomes positive and significant during the de-escalation period. However, a firm-level analysis reveals that market prices do not reflect the impact of COVID-19 and in a multivariate analysis we find that, in general terms, market liquidity and the percentage of shares held by institutional investors are the only variables related to abnormal returns. Second, we observe a strong negative impact on the operating performance of REITs during the first half of 2020, regardless of the type of property and the incidence of COVID-19 by region according to the location of the assets.