A property with a very low discount rate is likely to have what kind of value and risk profile?

A property with a very low discount rate suggests that investors have a high level of confidence in the cash flows it generates, leading to a higher present value of those future cash flows. In essence, a low discount rate indicates lower perceived risk associated with the investment, which typically translates to a more stable income stream and less volatility in returns.

This high perceived value is often attributed to factors such as a strong location, steady tenant occupancy, long-term leases, and high demand in the market. Investors are generally willing to accept lower returns when they believe the investment is secure and has good potential for sustained performance.

Therefore, a low discount rate correlates positively with higher property values while also implying a low-risk profile. Investors are more likely to engage in these low-risk properties because the likelihood of default or income interruptions is minimal, leading to more stable and predictable returns.