Time to take profits?

The “upweighting” of real estate over the years caused yield compression. Previously strong equity markets also had the added denominator effect of requiring further allocations to real estate simply to match the expansion in size of an institution’s stock portfolio. So the “lower for longer” stasis suggested continued real estate demand.

“With the COVID-19 outbreak resulting in drastic central bank policy changes almost daily, it looks even more like a lower-for-even-longer rate environment, with a very high chance of further fiscal stimulus, too,” says Jo McNamara, the head of Europe at Oxford Properties. What was previously an “abundance of capital” where allocations to real estate were on track to increase, will now “depend on what the wider economic implications are of the COVID-19 crisis.” As mentioned above, however, having flexibility on how to access transactions, including in real estate, will be key for long-term investors, such as Oxford Prop