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Commercial property investors face two crucial problems

As valuations fall, REIT landlords are considering asset sales to avoid debt covenants. But in this market, sales will probably lock in lower valuations.

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There were two key messages for investors from the results of the Charter Hall Long WALE REIT on Tuesday.

The first is that not all commercial property is created equal. The value of the real estate investment trust’s total portfolio fell 5 per cent to $6.8 billion. But different property types fell at different speeds: office property took the biggest hit, down 9.1 per cent, industrial/logistics property was flat, and retail was down 5.3 per cent.

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James Thomson is senior Chanticleer columnist based in Melbourne. He was the Companies editor and editor of BRW Magazine. Connect with James on Twitter. Email James at j.thomson@afr.com

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    Original URL: https://www.afr.com/chanticleer/the-commercial-property-sector-faces-a-familiar-but-tricky-problem-20230808-p5duwq