To say that the last two years have been a rollercoaster ride for property investors would be wrong. Bar a few rallies, shareholders in property companies have endured more of a helterskelter slide since the introduction of the long-anticipated real estate investment trust regime in 2007.
First hit by the start of the cyclical property slump, then by financing issues in the wake of the credit crunch, the new year began with worries over revenue in a worsening recession.
In the maelstrom created by these three factors, property companies underestimated their need for cash, despite rapidly nearing gearing covenants as asset values continued to plummet.
Now, with further value falls expected, the sector is scrambling for funds to cure straining balance sheets that are burdened by too much debt in relation to the declining value of properties.
