The volatile equity market may often overshoot, but it gets the direction right. After almost six months of economic lockdown, backward-looking property valuations should continue to fall. This has been compounded by tenants struggling to survive, the coronavirus worsening existing structural challenges such as internet shopping and flexible working, irresponsible property oversupply, few buyers but many potential sellers, exorbitant increases in municipal charges and the level and yield of government debt. Listed property real estate investment trusts (Reits) are, understandably, in crisis.
Share prices have more than halved in 2020 and Reits are trading at a similar discount to net asset values (NAVs). ..
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