Sea change in investor mentality needed to drive returns
- February 1, 2024: Vol. 16, Number 2

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Sea change in investor mentality needed to drive returns

by Marek Handzel

There has to be a sea change in property investment mentality as capital allocators can no longer rely on yield compression and cheap debt to drive returns.

In its latest Global Real Estate Outlook report, M&G Real Estate says real estate investors will need to rely on generating high yields and growth in an economic environment of increased interest rates and debt costs that now dominate many markets.

The report says it has become clear there will be no quick return to the rock-bottom interest rates that investors got used to after the global financial crisis. And, while the end of real estate’s painful repricing may be in sight — or tentatively here already in some markets — investors cannot rely on strong yield compression to drive returns going forward. Instead, argues the report, investment strategy should focus on generating returns through high-income yields where available, including investing in real estate debt, or through high-income growt

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