Property sector bounces back "With commercial property values plunging in response to the credit crisis, is it time to rebuild your property portfolio?..."
By Nathan Bell With commercial property values plunging in response to the credit crisis, is it time to rebuild your property portfolio?
Like a drowning tourist rescued on Bondi Beach, investors have given the listed property sector the kiss of life with around $15bn of fresh equity. Back in March few believed it could be revived but, barely six months on, several highly geared trusts are up almost 10-fold off their lows – even Centro Properties has seemingly stepped away from the precipice, with its security price more than doubling this month.
There are logical reasons why commercial property is back in vogue; prices have dropped significantly; interest rates remain low; the Australian economy is one of the world’s strongest; listed property trusts have collectively raised around $15bn to cut debt; and property offers protection against inflation, which might erupt following large government and central bank stimulus.
CNP Price at posting:
38.0¢ Sentiment: ST Buy Disclosure: Held
