It’s tough time for real estate investment trusts (Reits) and housebuilders. In reaction to chancellor Kwasi Kwarteng’s disastrous “mini” Budget, Independent Living Reit has abandoned a planned £150mn IPO, LXi Reit (LXI) binned its plans to buy a £500mn supermarket portfolio, and share prices in property companies slumped across the board.
While the listed property sector has seen some value recovery since, the medium-term outlook remains gloomy. The sector is worried about what the toxic mix of rising gilt yields, high interest rates and a falling pound will mean for both commercial and residential assets – and they have good reason to be.
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