Structure deals, but tread gently.

Posted On Monday, 25 August 2003 02:00 Published by
Rate this item
(0 votes)
There is a strong case to be made for "sensible use" of more gearing of property investments right now.

There is a strong case to be made for "sensible use" of more gearing of property investments right now.

 

While Luntz Rodney of property consultancy, Abro Luntz, warns against structuring property deals based on second-guessing interest rates, he feels there is no doubt that higher gearing is being encouraged by the lower interest rate trends.

 

"However, no two opportunities are identical. Gearing packages have to be carefully and correctly structured to a given development or purchase.

 

"Softer interest rates are boosting the business climate generally," he points out, "and demand for commercial property is benefiting accordingly to ensure escalating growth in values and the associated benefits of capital gains.

 

"What's more, interest rates are likely to drop again later this year," he says.

 

The ingredients were therefore in place for a classic property gearing climate.

 

Lower interest rates meant enhanced returns and - from a selling perspective - the market could expect a tightening of yields which would translate into a higher selling price, similar to the mechanisms driving the bond market.  - The Star


Publisher: The Star
Source: The Star

Most Popular

Investec Property Fund launches first REIT sustainability-linked ESG bond in Africa

Apr 22, 2021
Darryl_Mayers_CEO
Investec Property Fund (‘IPF’ or ‘the Fund’) today became the first South African real…

Rethinking office space in post pandemic SA

Apr 20, 2021
90_Rivonia_results
Since the beginning of the pandemic, one of the biggest questions in real estate has been…

4 simple rules to getting a good credit score

Apr 21, 2021
Carl_Coetzee_BetterBond_CEO
Make buying your dream home an informed purchase by knowing your credit score.

EPP’s new app takes tenant relations to the next level

Apr 22, 2021
Tomasz_Trzósło
Johannesburg Stock Exchange listed EPP, Poland’s biggest retail landlord, continues to…

Western Cape ripe with affordable housing potential

Apr 20, 2021
Tuhf_Hi_res24
The TUHF Western Cape regional team believes that even though COVID has had an impact on…

Please publish modules in offcanvas position.