Wealthy investors punt on commercial real estate
HIGH net-worth investors will join institutions and sovereign funds in moving back to the commercial property sector in the search for higher-yielding and safe-haven sectors, according to directors of Australian Unity Investments.
The inflow of cash will be boosted by the lower interest rates, which will turn investors away from holding cash to the inflation-proof bricks and mortar.
Healthcare, larger-scale shopping centres and traditional office and industrial assets are said to be the targets for the cash.
An expected increase in mergers and acquisitions within the listed real estate investment trust sector in coming months is likely to impact the institutional end of the market, with the retail "mums and dads" and self-managed super funds tipped to continue to favour the less volatile wholesale funds and small direct property deals.
The forecast flight to quality and safe-haven property comes as the Real Estate Investment Trusts sector beds down for the reporting season, covering the first six months of the 2013 financial year.
Analysts are tipping a steady return of about 4 per cent, with a focus on what changes new chief executives will make to their strategies.