There has been a lot of speculation about the big banks, who own most of the loans used to buy commercial and industrial property, being forced to recognise that those properties are overvalued. If so, their loans would be in breach of lending conditions on loan to value ratios. They would then be forced to call for the repayment of the loans immediately. Which would trigger a spate of bankruptcies in the property industry, forced sales and a decline in values of property investments.
This may be idle speculation or it may be rumours put about by the many vulture funds who have raised enormous funds to use in buying up these hypothetical forced sales. Or of course it may be true.
Time will tell. For what it is worth, I hold shares in several REITs and property finance companies. Sound ones: I believe after doing my research.
The price of your unit trust has been adjusted to discourage panic sales by investors, which might, in a chain reaction, force the fund to make sales at knock down prices. That is one excellent reason to avoid any kind of open ended fund. They are vulnerable to investor panic attacks.
There are REITs (closed ended funds) which pay quarterly dividends (e.g. Schroder Real Estate Investment Trust) and by splitting your investment between different REITs you can stagger the arrival of dividends.
If necessary get two dividends in February and don't spend one until March. Do a little creative thinking :-)
