Negative returns for unlisted property in 2009: Oliver
AMP chief economist Shane Oliver has singled out unlisted property as a key area of concern for 2009, with returns in this asset class likely to head into negative territory next year.
Oliver named unlisted investments, including unlisted infrastructure and commercial property, as “the thing I would worry about most next year”.
He said unlisted property returns remained positive in 2008 “thanks to solid rental growth, which had initially offset upward pressure on yields”. But he noted that rental growth is now flagging and that valuations have started to slide.
Looking towards 2009, Oliver said valuations in unlisted non-residential property are likely to decline. This would be the effect of stalled rental growth in response to the economic downturn, and an escalation of upward pressure on capitalisation rates in response to forced selling.
“As a result, returns are likely to be negative,” Oliver said.
Recommended for you
Australian fund managers are actively seeking to launch Cayman versions of their funds to attract offshore flows, with Regal Partners set to launch its latest offering this month.
As private markets gain traction in Australia but only a limited pool of talent is available, three recruiters explore whether fund managers should consider looking overseas to find top talent.
With an explosion of private credit managers appearing in the market, two alternatives experts believe a consolidation is needed to maintain the quality of the sector.
Bentham Asset Management has become the latest fund manager to expand its distribution team as it reports increased interest in its credit strategies.
