FOUR QUADRANTS – DEALING WITH UNCERTAINTY
The Chinese economy is slowing, Japan is planning more economic stimulus and geo-political risk in the Middle East and parts of Europe are showing no signs of subsiding. Is it any wonder that capital markets have been skittish and property investors are a little hesitant? Recent editions of the Capital Advisors Quarterly Four Quadrants publication have examined the impact of widespread uncertainty on property markets where fundamentals are broadly benign.
These big themes continue in this latest edition, but the detail changes.
Previous Four Quadrants have re-iterated the generally sound fundamentals of the real estate sector. While the UK is clearly in a later stage of the cycle than Europe, occupier demand is firm, the new supply is broadly manageable, and the economic outlook is reasonable. But in a capital intensive business, capital market volatility in an environment of potential political instability does not foster investor confidence. Looking forward also, some of the questions weighing on investors’ minds will be answered. In the meantime, caution is likely to be the watchword and defensive investment strategies will be the most prevalent.
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