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Monday, July 28, 2008

Real Estate Investment: Dawn of a New Era
















Real Estate Investment: Dawn of a New Era

The recent era of exceptional real estate returns fuelled by low cost and readily available debt came to an end in 2007. Some investors will choose to wait until the economic and capital market outlook becomes clearer, before committing further capital to the sector. Yet, although the medium-term and long-term outlook is for lower returns than in the recent past, it is still at a level of return and risk that will be attractive compared to other asset classes.

With the global economy set to slow from its very rapid growth rates of the last few years, commercial real estate market fundamentals should remain sound, provided slower growth in the US in particular does not become a recession. Growth in demand for commercial real estate may weaken, but it should remain suffi cient to absorb the muted levels of new construction in the pipeline and to help underpin rental growth.
However, the risks to the outlook clearly are asymmetric on the downside. [Download]

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