Reita, the UK's education and awareness campaign for property investment and real estate investment trusts, has called on Britain's Financial Services Authority to extend the ban on short selling of stocks to the commercial property sector. The organisation suggested that the ban in the financial sector could tempt short sellers to seek opportunities in the property sector. Reita believes expanding the ban would help the commercial real estate sector to address continuing market volatility.
Reita, the UK's education and awareness campaign for property investment and real estate investment trusts, has called on Britain's Financial Services Authority to extend the ban on short selling of stocks to the commercial property sector. The organisation suggested that the ban in the financial sector could tempt short sellers to seek opportunities in the property sector. Reita believes expanding the ban would help the commercial real estate sector to address continuing market volatility.
Dave Butler, head of external affairs at Reita, said that 60% of property industry leaders polled in the Reita's recent Property Investment Perspective report indicated they felt volatility caused by shorting was a serious issue.
Patrick Sumner, chair of Reita, commented: 'The activity of short selling in the commercial property sector is at the root of current unprecedented volatility. The property sector as a whole is not very liquid, especially in the small and mid-cap names, exposed to higher leverage or developments that have been the target of some aggressive (and indiscriminate) shorting. In the long run such volatility is not a concern, but it is certainly unsettling in the short term.'
