Niche property assets

Investors risks may be higher due to the pandemic and current recession however the rewards for those willing to make the most of new opportunities, big discounts and less competition for quality assets are reaping the rewards.

AMP Capital’s head of investment and chief economist, Shane Oliver believes the economy is being preserved by indications of recovery, policy stimulus and once-pessimistic investors closing underweight or short positions.

A-REIT, the Australian Real Estate Investment Trusts which allows investors access to commercial property assets may have experienced a few turbulent months.

“Empty shopping centres, recession, rising unemployment, the growth of online buying and a growing transition of employees from city to home offices have slashed A-REIT values by billions of dollars”.

However Sebastian Stevens, partner of corporate of finance at consultancy BDO Australia believes A-REIT’s top management has learned from the global financial crisis and in turn have dropped their borrowing from 50% to 30% approximately, found long-term and diversified tenants and tapped into cheaper capital.

Residential buyers have shown a growing demand for properties in regional cities with the new opportunity to work from home. Out-of-town buyers are being lured opportunities up to two hours from the major metropolises with lower prices, quality road and rail links to the cities and established infrastructure.

This is a summary of the article ‘Niche property assets defy real estate doom and gloom’ by Duncan Hughes | Friday 12^th June 2020 | AFR – The Australian Financial Review | Friday 12^th June 2020.