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Rising
Interest Rates Will See An Increase In Market Yields
December
2007
With a 25 basis points rise in interest rates in November
and a further two increases predicted. It is inevitable that the yields used to
capitalise EBIT’s will rise by at least one percentage point for the valuation
of all Hotels to reflect the increased cost of money.
Therefore it is expected that city CBD yields will increase to between 8% and
9%, inner city suburbs of 10% and metropolitan fringe to 11% while regional New
South Wales to increase to between 12 % and 13% depending upon locality.
John Williams
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