Erosion of Commercial Real Estate as a Solid Asset Class
London, UK - 16 July 2007, 23:37 GMT
Dear ATCA Colleagues
[Please note that the views presented by individual contributors are not
necessarily representative of the views of ATCA, which is neutral. ATCA conducts
collective Socratic dialogue on global opportunities and threats.]
We are grateful to:
. Robert McNally, Chairman, London Chamber of Commerce Property and Construction
Group, for "Erosion of Commercial Real Estate as a Solid Asset Class;"
. Alexander Hoare, CEO, C Hoare and Co, Private Bankers, based in the City
of London, for "Destructive Creativity, Leverage
and The Derivatives Market;" and
. Dr Harald Malmgren, CEO, Malmgren Global, based in Washington, DC, for "The
Fear of Central Bankers -- Flight from Illiquidity, Derivatives and Heightened
Risk of Contagion;"
in response to, "Are the Currency Markets Warning
that there is Trouble Ahead? The Precipitous Decline of the US Dollar and
its Impact on the World."
Robert McNally is Chairman of the London Chamber of Commerce Property and
Construction Group, a member of the executive committee of the Singapore Business
Group in London and a member of the Investment Property Forum. Robert is a
Partner in the leading City of London based international law firm, Stephenson
Harwood. He is a recognised practitioner in real estate and real estate finance
matters with over twenty five years' practical experience of finding solutions
to real estate issues. He has a wealth of experience in all aspects of real
estate and other property backed financing arrangements. He has also lectured
in the UK and overseas on a variety of property related issues including,
real estate investment in the UK and contemporary issues in property financing.
Dear DK and Colleagues
Re: Erosion of Commercial Real Estate as a Solid Asset Class
I trust that you are all well. I have found this ATCA Socratic dialogue particularly
interesting since it reflects what I have been observing in the UK commercial
property market for some months now. Traditionally UK commercial property
has been an important asset class particularly favoured by entities such as
pension funds and life assurance companies principally because UK commercial
property has offered certainty of income over a long term. As a consequence
UK commercial property has formed a vital part of any balanced investment
portfolio, providing high levels of income security and also the potential
for capital growth, compared to the bond and equity markets, which have tended
to be more volatile.
Given the significant investment by UK pension funds in UK commercial real
estate and with current general concerns regarding the inadequacy of pension
provision in the UK, if there should be a "sudden disruptive movement"
in the commercial real estate market this would be a further blow to the pension
fund industry and the millions of workers who rely upon decent pension fund
returns to fund their retirement.
Watch this space!
We look forward to your further thoughts, observations and views. Thank
For and on behalf of DK Matai, Chairman, Asymmetric Threats Contingency
ATCA: The Asymmetric Threats Contingency
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