SIMON BROWN: I’m chatting now with Garreth Elston from Reitway Global about the impact of inflation on Reits, real estate investment trust stocks. Garreth, I appreciate your early morning as always.
I’ll just give you one example, a very recent study done by Cushman and Wakefield in the international markets, primarily on the US, looking at about 40 years of data. SIMON BROWN: … I take the point you mentioned, the economy is growing – and I get that. But I imagine increases for a lot of the leases and the like are going to be CPI-linked, which means you almost just lock them in – [there’s] not even a negotiation; you signed that lease three years ago?
We’ve chatted office before. Almost in a sense we are coming towards the end of the pandemic. Things are starting to improve. This almost gives them a bit of an extra sort of spurt in what could potentially be a good year and perhaps a good couple of years for the Reit sector – or am I perhaps a little overly optimistic?.
SIMON BROWN: A fair point to say is that in many cases – and we see this across listed stocks – they’re a little bit better off. They’ve reduced debt. They’ve got rid of some non-core, perhaps B-grade assets that they held. They are just generally looking in better positions and pricings are at or slightly below Nav rather than the premium we were paying five years ago.