Australia’s towering inferno burns out of control

The towering inferno has barely begun:

Some major city office towers could take another 10% to 15% hit to their valuations, making them the weakest links in a commercial property sector that remains under pressure from higher interest rates, Morgan Stanley’s Tim Church says.

“Office has probably got another 10% or 15% to go, particularly for some of the more challenged assets with poor tenancy profiles and in non-prime locations,” Mr Church, Morgan Stanley’s chairman and co-head of investment banking in Australia, said.

Here’s the chart:

It’s not just CBD. Anything peripheral is being smashed

Across all major suburbs:

And most major cities

Those burned alive will include:

• big super returns;
• REITS;
• CMBS;
• banks somewhat, though far less than 1990.