Listed property trusts offer value for money following a market fall in recent months, a Melbourne based property asset consultant has said.

“Staying competitive in an increasingly difficult market place with limited resources was clearly the number one challenge for board directors,” - Graeme Chipp

enewsletter signup:
Why subscribe?View archive

Listed Property Trusts Offer Value

Listed property trusts offer value for money following a market fall in recent months, a Melbourne based property asset consultant has said.

Sponsored Links

 

 

Listed Property Trusts Offer Value

News: 23 June 2008
Listed property trusts offer value for money following a market fall in recent months, a Melbourne based property asset consultant has said. Ken Atchison, principal of Atchison Consultants, addressed a property seminar held by the Centre for Investor Education (CIE) in Melbourne yesterday and cited the 30-35 per cent slump as a sign of “definite value in the sector”, especially compared with the unlisted sector.

Listed property trusts are suited to investors interested in consistent income a well as the potential for long term capital growth from a liquid property investment.

Atchison added that the office market in particular had strong potential for growth. “I see some real upside in the office market, and, to a lesser extent, in the retail market. In the industrial market, however, there’s probably a little weakness.”

In spite of falling prices, Atchison cited the current stable interest rate environment and Treasury’s predicted 3 per cent growth in 2008-9 as positives for investing in the current listed property trust market.

Demand for office space also means rising rents and ultimately, higher yields to the investor. “We’re seeing strong demand for office space, especially in Sydney and Brisbane, and that’s going to drive rentals and yields”, Atchison said.

Atchison said the changing nature of the listed property trusts market made investing more attractive for potential investors.

“What we were seeing in the market was a lot more complexity with listed property trusts; more gearing, a funds management component, management fees, and even refurbishment, all of which were having a price-earnings multiple applied to them.

“With hindsight we can see that when the market was applying price-earnings multiples of more than 20 times then a traditionally conservative investment vehicle was really being aggressively priced, and in the end that wasn’t sustainable.”

With ‘recession’ the word of the hour, many commentators have conceded that the outlook is bleak. Atchison, however, is not convinced. “Overall, I’m not buying into the gloom and doom scenarios. Although the economy has come off a bit, Treasury and the Reserve Bank are still looking at 3% plus growth, and that’s not to be sneezed at.”

By Katherine Vassallo
23th June 2008

To subscribe to Wealth Creator Click Here