Fundraising will be a “particular focus” in this regard, with fresh equity required to plug gaps where loan-to-value covenants are “at risk of being breached”.
The report notes that the last number of years has seen an increase in the prevalence of off-market deals taking place. While the report notes the evidence that inflation is being brought under control and the spike of the past 12 months is subsiding, it says it is remaining higher for longer than in the recent past due to the “stickiness of core inflation”, which excludes food and energy.
The slowdown was expected, with the rapid increase in the cost of capital in the second half of the year putting upward pressure on yields at a pace not previously witnessed.
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