Have you missed the bus?

Discussion in 'Commercial Property' started by Scott No Mates, 13th Mar, 2015.

  1. Scott No Mates

    Scott No Mates ...and people wonder why?

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    Not truly CIP investment but the easiest way to get into it (and catch some fleas too).


    SMH - REITs


    Something worth considering if you want to dip you toe into the market without all of the hassles. Just understand what you are buying.
     
  2. hugh72

    hugh72 Member

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    Definitely need to understand what you are buying, the LPT sector was smashed during the GFC think Centro etc. GPT had a large capital raising and investors holdings were instantly devalued by a massive amount. There has been a deleveraging across the sector apparently
     
    Last edited: 14th Mar, 2015
  3. Scott No Mates

    Scott No Mates ...and people wonder why?

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    Centro was a complete dodge when things went to mush. The good ones have weathered the storm without too much damage but the good buying opportunities at low entry points and high yields have probably already evaporated as investors appetite for risk increases.
     
  4. blw101

    blw101 Member

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    Most of the REIT's are not trading at significant premiums to NTA by accident.

    Cap rates for quality institutional grade assets are now well below long term averages with a flood of money (domestic and foreign super) looking for a home in commercial property. I suspect we will see this flow through to balance sheets when the June revals are done.

    Problem is, underlying fundamentals are still pretty weak, everyone is waiting for lower dollar and low rates to flow through to tenant demand...but then look at all the cranes in the sky...

    Don't see a lot of value now, maybe secondary assets or locations for a shortish hold window?
     
  5. Dazedmw

    Dazedmw Member

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    Yes, I pretty much agree with this. A lot of deals don't make sense on Aussie fundamentals until you realise the money was borrowed overseas at 2% and even 6% therefore looks good. Not sure what the depreciation in the $A did to that logic though.