As debt-servicing costs rise and site values fall, cash-flush investors are taking advantage of opportunities in a weaker market.
Richmond Bridge has secured a $105 million logistics development site in Yarraville, in inner-western Melbourne, that the investment manager said was a sign of well-priced opportunities increasingly coming to market for cash-flush buyers.
Rising financing costs are raising pressure on buyers across the board, from individual residential buyers to commercial developers and large institutions.While the conditions are unlikely to trigger a repeat of the meltdown of the global financial crisis, many smaller borrowers will have to sell assets as their rental revenue fails to keep up with rising repayment obligations.“Interest rates have gone up. The cost of debt has gone up. There will be bank-induced, covenant-related distress.
“We’re also keen on commercial office if there’s distress in the market, particularly in fringe locations.” “I think a lot of the escalation which has been substantial in the last 12 to 18 months is starting to moderate.
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