centro buys time for carve up..., page-9

It is the mark of an amateur to pick up some superficial news and blow it up as if it is the picture for everything. being time short does tend to make all of us amateurs in fields in which we do not specialise to some degree. Property can be classified into two broad groups- residential and commercial. Commercial is made up of Office, Industrial, Retail, Hotel/Accommodation, and a few more.
Trends in these commercial groups can be quite different. Typically office property is the most cyclical, retail property the least. There seems to be an almost endless supply of people who want to set up a shop to sell something. It is harder, much to get land in a good spot zoned for retail, than any other category. Offices can go up in the sky, but retail customers dont like climbing stairs. It goes on. So of all sectors, retail is the most safely defensive property to own provided it is well located and designed, in a modern country with zoning and planning regulation. The modern mall style retail properties get a disproportionate share of the business, followed by food and neighbourhood centres aligned towards convenience. It is in this safest of categories that the adventurous Australian trusts have ventured, and all too much doom and gloom is read into this by amateurs who are reading about trends in residential accommodation markets centred particularly in low end areas the rustbelt and the boom and bust areas of Florida etc. in the USA.
In the longer term the winners should tend to be be the ones who do their homework best and act accordingly. The losers will tend to be populated more by the ones who let too much fear and greed control their behaviour? It has ever been so?
ie it is essential to do the homework before spending your money-and not five minutes worth of the newspaper or TV. If thats the way, your money will tend to become someone elses money.
US retail property is not in any real trouble as yet compared to the residential market, but even that is patchy. Try getting a property on Manhattan cheap.
I think when I look at all the markets, where is safety and yield? What is guaranteed? Nothing. But people will always need to eat, and shop for things they need efficiently. Thats why retail property is defensive, in my book. If prices go down thesre are plenty of investors lookingfor income from savings. Get 1.5% on US bonds? Cant live on that for long when you are old. The social welfare wont go far. Trusts holding retail property should be a preferred asset clas for income investors, period. But dont gear it too highly. Watch the plimsoll line.
This endeth the sermon. Amen.