JP Morgan has suggested that commercial property is at a cyclical high to the extent that it is unsustainable, where major landlords could be prompted into a $5 billion sell-off.
"We think office assets values are unsustainable and it's obvious," the analysts wrote in a client note this week.
The research could be a call to action for several landlords such as Dexus, Investa, GPT, Mirvac and others to trade.
"The key drivers are higher market rents in Sydney and Melbourne, a compression in yields between the grades and demand from offshore capital, mainly Asia," the analysts wrote.
Further estimations include a cumulative net tangible increase of 18% for Dexus, 20% for Investa Office Fund and 11% for GPT. Dexus seems to be in the best position for a sell-down, however, there could also be a divestment by other property trusts.
Article source: http://www.afr.com/real-estate/office-asset-values-are-unsustainable-jpmorgan-20171128-gzutcj
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Level 3, 441 Kent Street Sydney
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Part floor 23, 9 Castlereagh Street Sydney
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Level 2, 1 Barrack Street Sydney
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