Wealthy investors punt on commercial real estate
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.
Frequently Asked Questions about this Article…
Directors at Australian Unity Investments say high-net-worth investors are returning to commercial property to seek higher-yielding and safe-haven assets. Lower interest rates are making cash less attractive and pushing investors toward inflation-resistant bricks-and-mortar investments.
The article identifies healthcare property, larger-scale shopping centres, and traditional office and industrial assets as the main targets for the inflow of investor cash.
According to the article, lower interest rates are expected to boost cash inflows into commercial real estate by turning investors away from holding cash and toward inflation-proof property assets.
An expected increase in mergers and acquisitions within the listed Real Estate Investment Trust (REIT) sector is likely to affect institutional investors more strongly, while retail investors and self-managed super funds (SMSFs) may continue to favour less volatile wholesale funds and small direct property deals.
The 'flight to quality' described in the article refers to investors shifting toward higher-quality, safe-haven property types—such as healthcare, major shopping centres, and strong office or industrial assets—rather than riskier or lower-quality holdings.
The article suggests retail 'mums and dads' and self-managed super funds (SMSFs) are tipped to favour less volatile options, including wholesale funds and small direct property deals, rather than participating heavily in large institutional M&A activity.
Analysts mentioned in the article are tipping a steady return of about 4% for the Real Estate Investment Trust sector as it heads into the reporting season covering the first six months of the 2013 financial year.
The article notes analysts are focused on what strategic changes new chief executives will make to their REITs, since leadership shifts can influence strategy and potentially affect sector returns during the reporting season.
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