The IVSC, in collaboration with RICS, released a new video looking at the impact of COVID-19 on global markets, geopolitics, and the global economy on 20 April. While much of the panel examines real property, IVSC’s chair, and former UK Chancellor of the Exchequer, Alistair Darling, offers an historical perspective to help business valuers.

‘This is different from 2008,’ Darling begins. The ‘complete fracture of the banking and financial system resulted in a situation where the then-biggest bank in the world, RBS, was within hours of running out of money.’

Still, this problem was ‘fixable,’ and leaders agreed on what needed to be done, whether from the Republican-led US or from the leader of the Communist Party of China. Now, 10 years later, risk has been somewhat controlled because banks are required to be better capitalised.

Today, governments are quite rightly ‘shutting down the economy in order to minimize contact,’ so we’re not at a recovery stage yet and ‘we are not yet in control of events’ or at a stage of declaring premature victory,’ Darling says. ‘Inevitably there is going to be scarring of the economy whether or not the anticipated global recession occurs.’

‘How do you value business assets when you don’t know where the end of the crisis may be,’ Darling asks. ‘Longer-term, some fundamentals will continue, but the global impact on transportation, or office space, or other areas, will be felt for years, even if governments, institutions, and individuals work across international borders to achieve a plan for recovery.’

Andrew Tilton, chief economist (Asia) at Goldman Sachs; Susanne Eickermann-Riepe, real estate leader at PwC Germany; and Simon Rubinsohn, chief economist at RICS, join Darling on the video.