The recent increase in borrowing costs for real estate investors might negatively impact private market values and lead to a slowing of leveraged privatisations, but Reits still offer better values relative to private market real estate than seen for many years
The past few months have been difficult for the global real estate securities market. The pull-back in Reit prices around the globe is primarily a spill-over from the recent turmoil in the credit markets. Notwithstanding the decline in Reit prices, the fundamentals for commercial real estate remain robust, with favorable supply/demand dynamics. In turn, the financial health of the public Reits has never been better. Year to date through 16 October, the index has fallen 5.7% in local currency. The UK and Continental Europe have been the two weakest regions, with year-to-date declines of 28...
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