What is the main source of business?
Has it undergone rapid expansion, taken on new substantial projects, hired a large number of staff and increased its overdraft? New hires may be under threat of redundancy, as in previous economic downturns the last one employed was the first one to go. The property industry is closely connected and interdependent between market sectors. At the top of our food chain, the investment houses receive allocations from superannuation funds, spend them on asset purchases or development, gear up on money from the financiers and employ a myriad of consultants, cascading fees and cashflow through all the levels below. Many fund management groups are stapled entities, having combined their business activities with their assets, many of them in Listed Property Trusts. With the fall in the share markets, their share values have also fallen, many in proportion to the risks perceived in their level of debt. After several interest rate rises the cost of borrowing money has increased substantially. The
