It is interesting to note that the basis of calculation of CPI was changed in Australia in the early 2000's to exclude mortgage payments and only include rentals. Rentals were artificially low as rent% plus capital growth% = return. When capital growth was high rents were lower.
Most Shopping centre rentALS RESET 30% after enjoying a CPI plus 2% contract rate over a 5 year lease period. This means rents have increased by over 40% above CPI in 5 years. Rents are based on property values and earnings on assets needed for property trusts.
Westfield recently reported some tenants having difficulty meeting repayments. I suggest we have seen the suckers that have been moving into vacated sites being unable to raise funds, so this may see a downward pressure on rentals and commercial property.
Surely Centro could raise funds easily if their cash flow was secure.
The asset inflation has been cushioned by cheap manufactures from China, but this is largely finished due to rising costs in China, and global resource price increases.
Hence the real ride is just begining.