Despite the seemingly intensified post-COVID-19 headwinds, I think Brookfield Property Partners (BPY) warrants investors’ attention. While the BPY portfolio is high-quality and thus, should prove less sensitive to the current backdrop, the market is currently pricing in an overly punitive discount to NAV. Plus, there’s additional downside protection from the ~$1bn commitment by BAM and partners, as well as the optionality from BPY’s rich development pipeline. At current prices, BPY investors pay for the core office portfolio and LP investments, and get the core retail assets for free.
To be clear, long-term concerns on the state of physical retail remain very valid. But quality counts as well, and BPY did a good job of highlighting the quality of its underlying assets and its higher tenant profitability at the recent investor day event. Case in point – BPY currently holds a 19% share in high-quality retail real estate in