Blog posts by Bryan Reid
Apr. 25, 2018
A decade after the global financial crisis, the era of ultra-low interest rates may be drawing to a close. Many real estate investors worry that rising rates could hurt their portfolios. However, our analysis suggests it’s the macroeconomic fundamentals driving interest rates, not the rise itself, that are most important.
It is sometimes assumed that larger real estate assets perform differently to smaller assets thanks to reduced accessibility and competition at the top end of the market. Using MSCI’s global private real estate dataset, we find evidence to support the assertion that the size of an asset does have an impact on its performance.
In a global environment of sluggish growth and low interest rates, yields on private real estate are under sustained pressure. Yields have been compressing since 2010 and are now lower than before 2007.
In recent years, Australian commercial real estate has attracted considerable attention from international investors, changing the dynamics of what was historically a domestically dominated market.