Investors in Brookfield Property Partners (BPY) couldn't have seen this coming: Shares of the real-estate management company crashed a shocking 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, was already in a freefall by then, as fears of coronavirus lockdowns on the various properties owned by the company spooked investors.
Brookfield has roughly $200 billion worth of assets under management and operates more than 450 million square feet in properties, primarily across office, retail, multifamily, and hospitality sectors. Over March, many malls, restaurants, and offices cut working hours or shut down as stricter lockdowns were imposed.
Brookfield has huge stake in office and retail properties, with core office contributing almost 70% to its net income in 2019. What the market is worried about, though, is the other part of Brookfield's business: its core retail portfolio that consists of malls, restaurants, and entertainment properties. The COVID-19 pandemic has only strengthened the retail apocalypse narrative, triggering fears that many brick-and-mortar stores may not survive the lockdown effect as more customers flock to the comforts of online shopping and stick with it.
Brookfield Property has the backing of parent Brookfield Asset Management (BAM -1.09%), which is a great advantage to have in such challenging times. Brookfield Asset Management itself released a statement last month, highlighting its liquidity position to convince investors of its capability to ride out the storm.
That said, Brookfield Property's line of business is among the ones that could be hit severely because of coronavirus repercussions, which is why investors' fears seem justified even if the stock has fallen far too much, too quickly.