That outlook is informed by an expectation of rates remaining higher for longer, which would put pressure on asset values in commercial property unless they can be offset by rental growth.
That outlook – which Mr Church dubs “the big chill” – is nevertheless leavened with some notes of optimism, as top tenants make a beelineBroader trends through commercial property are also apparent, as the market capitalisation of industrial giant Goodman swells, overtaking that of Westfield owner Scentre, while that of Dexus, a major office tower owner, has also fallen, compared with pre-COVID.
“Now that easy money is gone. We are in a new investment paradigm whereby it’s going to be higher for longer,” she said.“You’ve got to be in a sub-sector that has favourable drivers in order to offset the cost of debt.”