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Aussie mortgage market stirring after 2-year lull

Posted on 29 Oct 2009 | Comments Off

Analysts expect more issues of mortgage-backed securities as market sentiment improves

Australia’s commercial mortgage-backed securities market is coming back to life after a two-year lull thanks to improving investor appetite and because banks are looking to cut their exposure to property borrowers.

With A$2.4 billion (S$3 billion) of debt maturing next year, analysts expect a sprinkling of issues.

‘I could see around A$2 billion,’ said Chad Karpes, head of the Australian dollar bond syndicate at RBS in Sydney.

‘If we start to see the market sentiment improve, as it has been, … we could see A$2 billion-plus from a number of issuers across the commercial spectrum.’

Issuance of commercial mortgage-backed securities, or CMBS, has virtually evaporated since the market peaked in 2007 at US$230 billion globally when the US sub-prime mortgage crisis triggered billions of dollars in loan defaults worldwide. Continue reading →

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Outlook for Aussie Reits improving

Posted on 20 Oct 2009 | Comments Off

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. Continue reading →