The institutional sized ($30m+) long wale market is actually...

The institutional sized ($30m+) long wale market is actually frozen at the moment because REITS & syndicators are not able to buy at what everything was priced at last year ie. 4% cap rates.

The cost of debt a year ago was ~3%, so FUM gathering REITS / syndicators could buy at 4% cap rates, gear it up and show investors a 5-6% yield plus claim there'd be capital growth on top of that.

Now thats not possible because the cost of debt is ~5%, so gearing provides for negative carry at a 4% cap rate and REITS are all trading at discounts, so they're unable to raise capital anyway.

So assuming rates don't go down or up from here, the only thing that will allow REITS/ syndicators to start buying again, is if cap rates rise to 6% plus.

The reason why petrol stations, childcare centres and other under $20m properties are still selling on tight cap rates is because they are being purchased by private investors without debt funding. They don't care they are buying on a 4% cap rate, thinking property goes up always but they are in for some very poor long term returns.

The frozen market is why these "independant" valuations are still holding up. There really aren't many transactions happening in the instutitional market and even though everyone knows values have come back, the valuers get pressured by the big REITS who give them plenty of work, to keep valuations firm. That's why this plays out over ~18 months because it takes time for vendors to accept the new reality and markets to unfreeze. Then evidence mounts that values have come back a long way and independant valuers can no longer keep valuations high.