Listed prtoperty's bright future
Listed property trusts are at the start of a strong upward climb, according to Ausbil Dexia director Winston Sammut.
Listed property trusts are at the start of a strong upward climb, according to Ausbil Dexia director Winston Sammut.
The increase in returns and the positive outlook for listed property trusts (LPT) are being driven by interest rates, Sammut says, due to expectations that rates are likely to increase in the short term.
“The total return forecast for the LPT sector will be around 9.5 to 10 per cent for the year. This will be comprised of a yield of 7.5 to eight per cent and the remainder coming through capital growth,” Sammut says.
The swing up will be led by office trusts, which while only having an 1.3 per cent increase in distributions, should see higher returns due to increases in rent figures. Sammut says as these start to take effect in Melbourne and Sydney, they should translate into higher distribution growth.
He says total returns of 12 per cent can be expected for the calendar year and more than 14 per cent for the full financial year.
“Trusts generally had good returns without the volatility which plagued equity markets over the same period. Expectations are for more of the same in the year ahead with a reshuffle of sectors and rationalisation leading to a focus on larger trusts,” Sammut says.
In the year to June distributions from LPTs rose 2.4 per cent while earnings growth came in at 3.2 per cent.
The distributions were led by retail trusts up by 3.3 per cent. Diversified trusts and industrial and office trusts also increased but were overshadowed rising only 2.1 and 1.3 per cent respectively.
AUTHOR
Jason Spits
Recommended for you
With an advice M&A deal taking around six months to enact, two experts have shared their tips on how buyers and sellers can avoid “deal fatigue” and prevent potential deals from collapsing.
Several financial advisers have been shortlisted in the ninth annual Women in Finance Awards 2025, to be held on 14 November.
Digital advice tools are on the rise, but licensees will need to ensure they still meet adviser obligations or potentially risk a class action if clients lose money from a rogue algorithm.
Shaw and Partners has merged with Sydney wealth manager Kennedy Partners Wealth, while Ord Minnett has hired a private wealth adviser from Morgan Stanley.
