Real Estate Executive Report 2009
Welcome to the 2nd edition
In this second edition of the Real Estate Executive Report we have asked our industry specialists to consider how the key elements of the sector may look once the current turmoil has fully played itself out.
There are the headline issues facing all of us of falling capital values, scarcity of debt finance and the risk to rental income of the rising tide of company and personal insolvencies. Looking beyond, it appears certain that the once the dust has settled we will be left with a much changed real estate financial landscape, in many ways permanently.
After an extremely turbulent period following the collapse of Lehman Brothers last September, the industry appears to have begun to adjust to the new market circumstances, and start to look to the future. For example, we have recently seen a number of the larger UK real estate Plc’s launching rights issues with the intent both to ease the pressure on stressed balance sheets, and to put them in a position to take advantage of significant opportunities as they arise. A number of investors have also tentatively come back into the market as yields have risen and instances of perceived value have been identified.
We anticipate significant changes to the real estate fund industry. The ‘music has stopped’ for business models set up for the good times, turning management teams’ focus towards existing portfolio issues and addressing investor concerns such as demands for liquidity and cash realisation. We believe the repercussions of these changes will impact across open and closed ended funds, the institutional property market and the listed sector.
Construction companies appear to be facing a period of stagnation and we discuss the ways in which businesses can ‘batten down the hatches’ to get through. An unwavering focus on cash and working capital management is key in these conditions and we also highlight the role good corporate governance can play to ensure management have the requisite understanding of wider business performance.
For further information, download our full publication ' Real Estate Executive Report 2009'. (PDF, 797KB)
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