The outlook for Australian listed property trusts is improving as the nation’s currency strengthens and the local economy weathers the global recession, according to AMP Capital Brookfield.
Companies that raised capital through share offerings and sales of overseas assets will start to buy real estate assets from local private sellers, said Kim Redding, chief investment officer of AMP Capital Brookfield, a A$6 billion (S$7.7 billion) partnership formed this month between AMP Capital Investors and Brookfield Investment Management to invest in global listed real estate trusts.
‘Australia stands out like a beacon because the yields here are much greater than other parts of the world,’ Chicago- based Redding said at a media briefing in Sydney yesterday. ‘If you like the Aussie dollar and you like yield, Australian LPTs would be a pretty good place to be.’ Australia’s listed property companies are vying to return to profitability after the 16 members of the S&P/ASX 200 A-Reit Index reported combined losses of A$19.5 billion and writedowns of A$21.7 billion in the year to June 30, according to data compiled by Bloomberg.
The losses stemmed from an overseas buying spree between 2005 and 2007 which backfired when property values tumbled and borrowing costs spiked during the credit crunch, forcing companies to write down and sell offshore assets.
Companies on the S&P/ASX 200 A-Reit Index pay an average dividend yield of 8.1 per cent, according to data compiled by Bloomberg, compared with 4.4 per cent for the 78-member MSCI World Real Estate Index.
Source : Business Times – 20 Oct 2009