Pengana looks for property opportunities

Pengana Capital (Pengana) has announced the launch of an Opportunistic Listed Property Strategy that aims to capitalise on the turbulence in the listed property trust sector, it announced today.

The Pengana Strategy will focus on utilising opportunities created by mergers and acquisitions within the sector, it said.

Deutsche Bank’s former joint head of real estate investment banking (Australia), Tim Shaw, will manage the strategy.

Shaw argues that the loss on confidence in listed property trusts has created strong opportunities in the sector.

“Globally, listed property markets have fallen dramatically over the past 12 months and particularly in Australia since the demise of Centro Properties Group in December 2007,” he said.

Earlier this year Money Management reported that the Mercer Property Sector survey covering 2007 had found that the Australian listed property market had begun to fall in February of 2007.

The Mercer survey said that in total there had been negative returns in seven of the 12 months until January of 2007.

“The fall in Australian property stocks reflects, amongst other things, falling asset values and associated income and the resultant potential breaches of debt covenants,” Shaw said.

“Separately, there are high quality companies whose prices have been overly impacted by what has happened in the sector,” he said.

“We will therefore target value opportunities in quality companies.”

Pengana said that its strategy’s investment objective is to generate returns in excess of 18 per cent per annum over a three-year life.