Investor Presentaiton
FOREIGN INVESTMENT ADDS AN UNKNOWN TO TRADITIONAL ANALYSES
OF "DOMESTIC REQUIRED RETURNS"
10%
9%
Sydney CBD Required Return and Yield - Traditional analysis
8%
Risk premium
7%
6%
5%
4%
3%
Implied* growth
2%
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
Sydney CBD Prime required return
Source: RBA, CBRE Research
Sydney Prime Yield
10 year bond yield
*"Implied" growth is derived from the difference between IRR and observed market yields
CBRE
29
As foreign investors have a greater
influence on the market; we may need
to look beyond purely domestic
fundamentals
Implication: Creates a little less
certainty about predicting the
required return as need to factor in
international expectation for return
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