Aegis Equities Research picks up Property Investment Research

Property Investment Research (PIR) has been bought by Aegis Equities Research for an undisclosed amount.

PIR provides research and ratings on property funds, a sector which has been hit hard by the global financial crisis.

But Aegis managing director Peter Leodaritsis said despite the “current challenging economic backdrop”, he believes the long-term fundamentals of the property sector remain strong.

Leodaritsis said Aegis began offering research on the unlisted property sector in 2005, and that the acquisition of PIR was an opportunity for Aegis to consolidate its position in property research.

PIR retrenched four analysts earlier this year. At the time, PIR managing director Richard Cruickshank said the reduced demand for research from property managers had led to the researcher downsizing its operations.

Cruickshank said in February that while the group’s services were still running, it had “not been asked to rate any new products and managers have not asked to have their reports updated”.

Cruickshank said PIR’s decline in its ratings business during the past couple of years was due to several reasons, including the lower ratings the group issued to unlisted funds coming to the market in 2005, when the research house believed commercial property was overvalued. Cruickshank said the business was also hurt when it issued “less positive PIR ratings” to property managers who applied “the risky practice of returning capital as part of enhancing/boosting distributions”.

Both the value of commercial property and the use of capital for dividend payments have since emerged as serious areas of concern for investors in this sector.

Cruickshank said the lower ratings proved to be unpopular with managers, so they sought alternative reports “from less experienced and, in other cases, opportunistic research sources”.