It Isn’t Just Tesla’s Stock That Needs to Slow Down
Kanebridge News
    HOUSE MEDIAN ASKING PRICES AND WEEKLY CHANGE     Sydney $1,666,984 (-0.52%)       Melbourne $1,025,140 (-0.29%)       Brisbane $1,079,790 (+0.21%)       Adelaide $987,421 (+0.48%)       Perth $959,727 (+1.13%)       Hobart $774,699 (-0.85%)       Darwin $821,142 (+4.72%)       Canberra $946,671 (-0.99%)       National $1,096,933 (+0.01%)                UNIT MEDIAN ASKING PRICES AND WEEKLY CHANGE     Sydney $779,804 (-0.05%)       Melbourne $501,457 (-0.97%)       Brisbane $680,117 (+0.71%)       Adelaide $516,640 (-0.17%)       Perth $539,067 (+1.01%)       Hobart $528,172 (+0.12%)       Darwin $391,098 (+0.26%)       Canberra $495,303 (+3.15%)       National $576,956 (+0.40%)                HOUSES FOR SALE AND WEEKLY CHANGE     Sydney 12,076 (-85)       Melbourne 14,218 (-287)       Brisbane 8,085 (-106)       Adelaide 2,943 (+40)       Perth 7,410 (-63)       Hobart 1,202 (-4)       Darwin 165 (-4)       Canberra 1,087 (-18)       National 47,186 (-527)                UNITS FOR SALE AND WEEKLY CHANGE     Sydney 9,230 (-171)       Melbourne 7,611 (-611)       Brisbane 1,520 (-30)       Adelaide 404 (-17)       Hobart 212 (+1)       Hobart 215 (-13)       Darwin 287 (+2)       Canberra 1,186 (-1,198)       National 22,003 (-2,039)                HOUSE MEDIAN ASKING RENTS AND WEEKLY CHANGE     Sydney $800 ($0)       Melbourne $595 ($0)       Brisbane $650 ($0)       Adelaide $640 (+$10)       Perth $700 ($0)       Hobart $583 (+$3)       Darwin $720 (-$30)       Canberra $710 ($0)       National $681 (-$3)                UNIT MEDIAN ASKING RENTS AND WEEKLY CHANGE     Sydney $750 ($0)       Melbourne $590 ($0)       Brisbane $650 (+$10)       Adelaide $550 (+$15)       Perth $665 (+$15)       Hobart $500 (+$18)       Darwin $550 (+$35)       Canberra $590 (+$5)       National $615 (+$10)                HOUSES FOR RENT AND WEEKLY CHANGE     Sydney 5,732 (-16)       Melbourne 7,664 (+4)       Brisbane 3,892 (-6)       Adelaide 1,458 (-8)       Perth 2,305 (-13)       Hobart 236 (+7)       Darwin 76 (-1)       Canberra 465 (+5)       National 21,828 (-28)                UNITS FOR RENT AND WEEKLY CHANGE     Sydney 7,852 (-14)       Melbourne 5,484 (0)       Brisbane 1,900 (+20)       Adelaide 413 (-1)       Perth 778 (+6)       Hobart 90 (-8)       Darwin 86 (+7)       Canberra 544 (-22)       National 17,147 (-12)                HOUSE ANNUAL GROSS YIELDS AND TREND       Sydney 2.50% (↑)      Melbourne 3.02% (↑)        Brisbane 3.13% (↓)     Adelaide 3.37% (↑)        Perth 3.79% (↓)     Hobart 3.91% (↑)        Darwin 4.56% (↓)     Canberra 3.90% (↑)        National 3.23% (↓)            UNIT ANNUAL GROSS YIELDS AND TREND       Sydney 5.00% (↑)      Melbourne 6.12% (↑)      Brisbane 4.97% (↑)      Adelaide 5.54% (↑)      Perth 6.41% (↑)      Hobart 4.92% (↑)      Darwin 7.31% (↑)        Canberra 6.19% (↓)     National 5.54% (↑)             HOUSE RENTAL VACANCY RATES AND TREND       Sydney 2.0% (↑)      Melbourne 1.9% (↑)      Brisbane 1.4% (↑)      Adelaide 1.3% (↑)      Perth 1.2% (↑)      Hobart 1.0% (↑)      Darwin 1.6% (↑)      Canberra 2.7% (↑)      National 1.7% (↑)             UNIT RENTAL VACANCY RATES AND TREND       Sydney 2.4% (↑)      Melbourne 3.8% (↑)      Brisbane 2.0% (↑)      Adelaide 1.1% (↑)      Perth 0.9% (↑)      Hobart 1.4% (↑)      Darwin 2.8% (↑)      Canberra 2.9% (↑)      National 2.2% (↑)             AVERAGE DAYS TO SELL HOUSES AND TREND       Sydney 33.9 (↑)        Melbourne 32.6 (↓)     Brisbane 35.9 (↑)      Adelaide 30.2 (↑)      Perth 41.5 (↑)      Hobart 37.1 (↑)        Darwin 23.7 (↓)     Canberra 35.3 (↑)      National 33.8 (↑)             AVERAGE DAYS TO SELL UNITS AND TREND       Sydney 32.6 (↑)      Melbourne 32.8 (↑)        Brisbane 31.9 (↓)     Adelaide 29.3 (↑)      Perth 41.0 (↑)      Hobart 37.4 (↑)        Darwin 41.2 (↓)     Canberra 42.9 (↑)      National 36.1 (↑)            
Share Button

It Isn’t Just Tesla’s Stock That Needs to Slow Down

Elon Musk boosters and sceptics alike might agree that the car industry’s value leaves little room.

By Stephen Wilmot
Thu, Nov 18, 2021 4:53pmGrey Clock 2 min

Whatever your view on Tesla, pulling money out of the car industry right now makes sense.

Two years ago, the world’s top 10 auto makers by market value outside China were together worth about US$680 billion. Now they are valued at more than $2 trillion. Tesla has jumped from third place to an enormous lead, and this month electric-vehicle makers Rivian and Lucid replaced Honda and Ferrari in the ranking. Rivian’s stock has more than doubled since its initial public offering last Wednesday.

This extraordinary surge in market value, which the changes in the pecking order suggest is mainly related to EVs, is almost impossible to rationalize. The earnings potential of a mature industry can’t have tripled. It is possible that EVs will eventually be more profitable than gas-powered ones—Tesla’s 14.6% operating margin in the third quarter showed the potential—but three times as much is a wild stretch.

The more difficult question, one that generates more heat among investors than perhaps any other right now, is which companies are more overvalued. Is it Tesla, Rivian and Lucid, which will have to grow exponentially to live up to valuations that have nothing to do with their current sales? Or is it incumbent giants like Volkswagen and Toyota, which are in different ways struggling to come to terms with EVs

Like simple market-value comparisons—Tesla is now worth four Toyotas!—conventional valuation multiples flag the EV specialists as overvalued. Tesla stock trades at 127 times forward earnings compared with less than 10 for most traditional car makers. Having just started commercial production, Rivian and Lucid don’t even have meaningful financial numbers to compare their $100 billion-plus market values to—just business plans.

But looking further into the future, as today’s record-low real yields on safe assets encourage, it is also easy to see old-school manufacturers as overvalued. The likes of General Motors and Ford have announced eye-catching EV investments funded by their conventional-car profits, and investors have rewarded their boldness. Both stocks are close to decade highs. But they have yet to talk about the challenge of winding down their vast combustion-engine operations. As EVs take market share, a reckoning will begin that may make clearer to investors the costs associated with this technological transition for a heavily unionized industry.

Tesla’s valuation only really adds up if it hits its target production capacity of 20 million vehicles a year by 2030, and at very healthy margins. Elon Musk’s ambition is hubristic given the problems car makers have faced historically when they have approached even the 10 million mark—think of VW’s diesel scandal, Toyota’s unintended acceleration, the unraveling of the Renault-Nissan-Mitsubishi alliance.

Yet it isn’t unprecedented for a disrupter to take a disproportionate share of industry profits for a surprisingly long period, says Philippe Houchois, an analyst at Jefferies who rates Tesla a buy. Ford did so in the 1910s and Toyota in the 1970s. Both companies brought a new simplicity to making cars, as Tesla also wants to. Toyota’s edge in traditional mass-market auto manufacturing persists to this day in the form of industry-leading margins.

Passions run high in this debate, which time will settle only slowly. The one thing that seems clear now is that investors overall are far from adequately discounting the unusual level of uncertainty about what the car industry will look like in 2030. When the fog gets thick, speeding up with excitement isn’t the best response.

Reprinted by permission of The Wall Street Journal, Copyright 2021 Dow Jones & Company. Inc. All Rights Reserved Worldwide. Original date of publication: November 16, 2021



MOST POPULAR

As Australia’s family offices expand their presence in private credit, a growing number of commercial real estate debt (CRED) managers are turning to them as flexible, strategic funding partners.

Knight Frank’s latest Horizon 2025 update signals renewed confidence in Australian commercial real estate, with signs of recovery accelerating across cities and sectors.

Related Stories
Money
Why Family Offices Are Emerging as Preferred Partners for CRED Managers
By Opinion: Faris Dedic 23/05/2025
Money
STARS AND STRIKING METALS: NEW SOUTHERN CROSS COIN CELEBRATES AUSTRALIA IN GOLD
By Jeni O'Dowd 22/05/2025
Money
7 Ways To Self-Fund Your Retirement Beyond Just Your Super
By Helen Baker 21/05/2025
Why Family Offices Are Emerging as Preferred Partners for CRED Managers

As Australia’s family offices expand their presence in private credit, a growing number of commercial real estate debt (CRED) managers are turning to them as flexible, strategic funding partners.

By Opinion: Faris Dedic
Fri, May 23, 2025 3 min

Family offices are increasingly asserting their dominance in Australia’s private credit markets, particularly in the commercial real estate debt (CRED) segment.

With more than 2,000 family offices now operating nationally—an increase of over 150% in the past decade, according to KPMG—their influence is not only growing in scale, but also in strategic sophistication.

Traditionally focused on preserving intergenerational wealth, COI Capital has found that family offices have broadened their mandates to include more active and yield-driven deployment of capital, particularly through private credit vehicles.

This shift is underpinned by a defensive allocation rationale: enhanced risk-adjusted returns, predictable income, and collateral-backed structures offer an attractive alternative to the volatility of public markets.

The Competitive Landscape for Manager Mandates

As family offices increase their exposure to private credit, the dynamic between managers and capital providers is evolving. Family offices are highly discerning capital allocators.

They expect enhanced reporting, real-time visibility into asset performance, and access to decision-makers are key differentiators for successful managers. Co-investment rights, performance-based fees, and downside protection mechanisms are increasingly standard features.

While typically fee-sensitive, many family offices are willing to accept standard management and performance fee structures when allocating $5M+ tickets, recognising the sourcing advantage and risk oversight provided by experienced managers. This has created a tiered market where only managers with demonstrated execution capability, origination networks, and robust governance frameworks are considered suitable partners.

Notably, many are competing by offering differentiated access models, such as segregated mandates, debt tranches, or tailored securitisation vehicles.

Onshore vs. Offshore Family Offices

There are important distinctions between onshore and offshore family offices in the context of CRED participation:

  • Onshore Family Offices: Typically have deep relationships with local stakeholders (brokers, valuers, developers) and a more intuitive understanding of planning, legal, and enforcement frameworks in Australian real estate markets. They are more likely to engage directly or via specialised mandates with domestic managers.

  • Offshore Family Offices: While often attracted to the yield premium and legal protections offered in Australia, they face structural barriers in accessing deal flow. Currency risk, tax treatment, and regulatory unfamiliarity are key concerns. However, they bring diversification and scale, often via feeder vehicles, special-purpose structures, or syndicated participation with Tier 1 managers.

COI Capital Management has both an offshore and onshore strategy to assist and suit both distinct Family Office needs.

Faris Dedic

Impact on the Broader CRED Market

The influx of family office capital into private credit markets has several systemic implications:

  • Family offices, deploying capital in significant tranches, have enhanced liquidity across the mid-market CRE sector.

  • Their ability to move quickly with minimal conditionality has contributed to yield compression, particularly on low-LVR, income-producing assets.

  • As a few family offices dominate large allocations, concerns emerge around pricing power, governance, and systemic concentration risk.

Unlike ADIs or superannuation funds, family offices operate outside the core prudential framework, raising transparency and risk management questions, particularly in a stress scenario.

So what is the answer? Are Family Offices the most Attractive?

Yes—family offices are arguably among the most attractive funding partners for CRED managers today. Their capital is not only flexible and long-term focused, but also often deployed with a strategic mindset.

Many family offices now have a deep understanding of the risk-return profile of CRE debt, making them highly engaged and informed investors.

They’re typically open to co-investment, bespoke structuring, and are less bogged down by institutional red tape, allowing them to move quickly and decisively when the right opportunity presents itself. For managers, this combination of agility, scale, and sophistication makes them a valuable and increasingly sought-after partner in the private credit space.

For high-performing CRED managers with demonstrable origination, governance, and reporting frameworks, family offices offer not only a reliable source of capital but also a collaborative partnership model capable of supporting large-scale deployments across market cycles.

Faris Dedic is the Founder and Managing Director of DIG Capital Advisory and COI Capital Management

MOST POPULAR

Renovations in Yorkshire included the revamp of a 30-room wing where a descendant of the estate’s builder still lives.

America’s premium nature attractions keep pulling in visitors, but until recently, most of the accommodation options were not too grand. These chic inns offer everything from soaking tubs to telescopes for stargazing.

Related Stories
Lifestyle
‘Walking Europe’s Last Wilderness’ Review: A Carpathian Ramble
By DOMINIC GREEN 19/03/2025
Property
PROPERTY OF THE WEEK: 91 WILLIAM ST, BRIGHTON
By Kirsten Craze 23/05/2025
Property of the Week
Château Immanuel: A Grand Hinterland Escape with a Private Lake
By Kirsten Craze 11/04/2025
0
    Your Cart
    Your cart is emptyReturn to Shop