- UBS global property index up 10.4 per cent in November
- UK, Europe, US, Singapore and Hong Kong equities could beat the market
Real estate investment trusts (Reits) around the world are dealing with several crises all at once. After almost 15 years of ‘free money’ from ultra-low interest rates, higher interest rates have been causing problems everywhere.
Issues are continuing to emerge as the year comes to an end. Austrian billionaire René Benko’s real estate empire collapsed in November, with European property executives saying he “gorged himself on cheap financing left, right and centre”. In the US, the news that Muddy Waters is shorting the Blackstone Mortgage Trust (US:BXMT), which provides loans to commercial real estate players in the US, Europe and Australia, has underlined the worries many now have about real estate debt. In China, mega developers Evergrande and Country Garden have spent most of 2023 teetering on the edge of bankruptcy due to concerns about their ability to repay loans, with little sign of a resolution in sight.