A Bitter Pill to Swallow
The banking crisis and ensuing economic environment has had a devastating impact on global real estate investment, with many markets suffering substantial declines in value over the past 12 to 18 months. While few predicted the scale of re-pricing, it was widely recognised that many real estate investment markets were not in equilibrium and that something had to happen for them to revert back to a more sustainable position.
For this reason, many investors with an international view had already made conscious allocation decisions to avoid markets that appeared to be relatively overpriced in favour of those that offered better relative value. In hindsight, almost all markets have repriced or are undergoing repricing and, therefore, most investors will suffer some detrimental impact on their portfolio, but some of this will have been mitigated by making timely and informed allocation decisions.
For practitioners with enough yea