How about this story then.
One of my good friends who visited me tonight is a leading senior commercial property valuer with one of the major firms.
He has moved his opinion that we will see a 20% reduction in valuations from 1 Jan 09 to 31 Dec 09 to one that it will be more like 25%.
The next round of valuations will get wheeled out for the last quarter soon and they are ugly.
Some fund managers have actually given up the sharade and asked for a realistic valuation on all of their properties. 20% hits in a single revaluation are now not uncommon.
Where the valuation doesn't get you, the bankers sucking the funds dry by doubling fees and margins (Westpac margin is now a whopping 3% for most of these property funds who have no chance of refinancing as the banks are not entertaining taking on new property clients, they are only supporting their existing clients (up to a point).
This sector has a ripper rally but its a dead cat bouncing I'm afraid. The guts will soon be ripped out of it again shortly.
Rents are cratering now and vacancies are climbing.
How about this story then.One of my good friends who visited me...
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