(Bloomberg) -- One of the U.K.'s biggest real-estate managers is predicting gloomy times ahead for bricks and mortar.
Insurance giant Aviva Plc expects residential property prices to drop 12% and commercial real estate to decline by 15% because of the impact of the pandemic, it said in an earnings update on Thursday. On a slightly brighter note, it sees long-term growth for house prices after they trough.
The coronavirus is threatening property values as businesses are forced to close to limit its spread and unemployment rises. The amount of rent collected by landlords in the U.K fell sharply in March and is likely to plunge further after the government limited landlords' ability to evict tenants.
Aviva's real assets platform, which includes real estate and infrastructure investments, managed 45 billion pounds ($55 billion), as of September last year.
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The insurer also said it expects to pay out around 160 million pounds in coronavirus related claims.
Insurance firms can expect to face at least $203 billion in losses this year as a result of the virus, according to Lloyd's of London. Claims relating to business interruption and event cancellations have already begun to be filed, and firms including Allianz SE, Munich Re and Swiss Re AG, have all warned that their profits will be hit.
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