Investors must play defence on property

real estate investment property real estate global financial crisis investors

30 January 2009
| By Benjamin Levy |

Commercial real estate has been caught up in a vicious cycle of value destruction as a result of the global financial crisis, and investors must adopt a defensive approach by protecting their income streams and managing their liquidity, according to LaSalle Investment Management’s report on real estate investment strategy for 2009.

Repricing is underway in Australia but it is spreading unevenly across regions and property types. Investors need to work with tenants by quickly adjusting rents to meet the new market reality and fashioning early renewals as part of their defensive strategy.

“We continue to believe that a disciplined investment process and an explicit strategy are the best ways to approach large, complex and chaotic markets. This is especially true during periods of great volatility. Playing a strong defence will be critical to emerging from this period as a winner,” said Robin Goodchild, co-author of the report.

Investors should also prepare themselves to take advantage of capital shortages and repricing when the market settles. A “third wave” of opportunistic investing will take place, and investors should watch out for real estate investment trusts and fund units trading at steep discounts and defaulted land deals in need of recapitalisation.

Read more about:

AUTHOR

Recommended for you

sub-bgsidebar subscription

Never miss the latest news and developments in wealth management industry

MARKET INSIGHTS

GG

So shareholders lose a dividend plus have seen the erosion of value. Qantas decides to clawback remuneration from Alan ...

2 months 2 weeks ago
Denise Baker

This is why I left my last position. There was no interest in giving the client quality time, it was all about bumping ...

2 months 2 weeks ago
gonski

So the Hayne Royal Commission has left us with this. What a sad day for the financial planning industry. Clearly most ...

2 months 2 weeks ago

Insignia Financial has made four appointments, including three who have joined from TAL, to lead strategy and innovation in its retirement solutions for the MLC brand....

6 days 6 hours ago

Having divested its advice business in August, AMP is undergoing restructuring in at least four other departments amid a cost simplification program....

3 weeks 5 days ago

The Reserve Bank of Australia's latest interest rate announcement has left punters disheartened on Melbourne Cup Day....

5 days 5 hours ago