Anyone who has ever had more than a passing interest in the economy will be keeping a close eye on the Reserve Bank of Australia and the cash rate. With the rate sitting at 1.5% for the last six months, NAB (1) are forecasting the rates will remain unchanged until a 25 basis point cut in November 2017 to 1.25%.
these low rates it is unsurprising that property, with its higher yields, has been a popular vehicle for investment.
CBRE’s latest Q4 Retail MarketView (2) said that large format retail is emerging as one of the most sought after asset classes, with an increase in offshore investment in 2016 helping drive sharp yield compression in the sector. Large format retail centre yields compressed faster than any other asset class in 2016, averaging a 60 basis point compression to 7.6% from 8.2% in 2015.
This has resulted in an increased valuation in most of MPG existing holdings, however it is making us more closely examine the value and potential, of possible future investment opportunities.
Increasing valuations is not the only measure we set ourselves. Our commitment to achieving strong unit returns, by actively managing most of our tenancies, is enabling us to provide the best possible value to our investors.
Thank you for your support, Yours faithfully