Against a backdrop of high unemployment, low interest rates and volatile markets, some institutional investors are leaning toward the barbell investment approach. On one end, they look to scoop up assets in the distressed retail and hospitality sectors, betting on a quick and sharp rebound in the post-COVID world. On the other hand, accredited investors are also balancing their portfolio with defensive assets such as data centres, which had held up strongly since the onset of the pandemic.
Despite concerns of a second virus wave as governments gradually loosen lockdown measures, market confidence has begun to turn the corner in certain cities. For instance, Australia’s consumer sentiment has now recovered back to nearly pre-COVID levels. Notwithstanding the encouraging survey result, this level remains 7 per cent compared to a year ago.
What caught our eyes this week
Financial Review – Investor risks might be higher than at the beginning of the year but so are the rewards for those willing to make the most of new opportunities, big discounts and less competition for quality assets.
The Business Times – The changing strategies are playing out against a backdrop of high unemployment in and low interest rates in the United States that may persist for a long time, Mr Van Konynenburg said on Tuesday in an interview on Bloomberg Television.
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The Urban Developer – Consumer sentiment is now back around pre-COVID levels as lockdown restrictions begin ease across the country. Westpac reported an increase of 6 per cent in its consumer sentiment index reaching 94 points in June, lifting from 88 points in May.
JLL – With the global economy under pressure, real estate investors are hunting for defensive strategies that are more likely to see them safely through the downturn. Data centres – buildings responsible for channelling our increasingly online lives – have crept to the top of that list.
JLL – Last month, China celebrated the tenth anniversary of its annual campaign to promote domestic tourism. But this year’s China Tourism Day took on a quirkier and more urgent tone due to COVID-19. Efforts to encourage travel after months of lockdown included online tours, live-streaming local produce, and promotional tactics like having the chairman of Chinese travel agency Trip.com donning costumes to hawk discounted hotel bookings.
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