Report: Investment Properties to Decline in Value

Cushman & Wakefield LePage releases its Outlook ’09 and Annual Market Review

The investment markets across Canada and the world have taken the hardest hits to date with the global credit crunch. Access to capital will continue to be the stumbling block for most investors in 2009 – creating a more buyer friendly environment.

“In many ways 2009 will shape up to be a “cash buyers market” – where well-capitalized private buyers, along with selective pension funds, public entities and possibly some new opportunity funds, will pick through the available product and take advantage of the limited competition on the buy side,” said Bergevin.

An increase in supply of individual asset sales is expected in 2009, as the “portfolio premium” that vendors were achieving through the bundling of multiple assets has virtually disappeared in the current market conditions.

Most vendors will be selling due to requirements to raise equity to offset debt maturities or other obligations, or to reduce the real estate component of their pension fund portfolio. This has the potential to set the new benchmarks for value, or at least spot value, at minimum.

“The coming year will be a very different market than previous years – landlords, tenants, buyers, and sellers are all going to have to adopt new strategies to make their real estate work,” said Bergevin. “There are no ‘one-size-fits-all’ solutions to the current market conditions. But there are effective, winning strategies to be found.”

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