I think all commercial property is like this, not just the...

I think all commercial property is like this, not just the REITS.

A position in an investment REIT primarily requires a view of:
a) Most importantly long term interest rates (if inflation skyrockets, and interest rates rise significantly its a double whammy: both through the interest finance cost and through an increase to cap rate: cap rate benched off the risk free rate of return all other factors being equal).

b) the quality of the underlying assets: essentially being the quality of the land

c) the other normal REIT factors: debt levels, current rents etc etc

At the end of the day SCG has very high quality land assets with future development potential (the land much greater than the shopping centre for many of its sites),. but they also have a reasonably high debt level (this is both positive and negative, VCX did a dilutionary capital raise which lowers risk, but reduces future returns).

I bought well last year, and at this moment am in no-mans land. Not adding, not selling. Waiting for year year end financials, but in my models I have factored in a 20% reduction in rental income compared to 2019 rents. Shopping centre rents will not be going above their 2019 levels for a while to come (and this I see from our own negotiations on new leases). Including negotiations with Westfield