Are the property market’s hurdle and escalation rates too high?

July 2003

Hurdle rates required by investors to induce them to invest in property were basically un-changed at 19% in quarter 2003:1 — a level at which they have been for many years. At the same time, the leaseback escalation rate got stuck at 10% or higher. This is in spite of the dis-inflationary environment in SA, the generally favourable prognosis for long-run inflation and the long-term character of property investments.

Read more: Are_the_property_markets_hurdle_and_escalation_rates_too_high_Jul03