PFA tips property funds growth

The property funds management sector is preparing for a period of growth, planning capital raising, hiring and acquisitions, according to a Property Funds Association (PFA) member survey.

More than half of members are planning on raising capital in the next 12 months, half intend to make an acquisition in that period, and more than half are planning on adding new staff in the same period, said Robert Olde, president of the PFA (formerly the Australian Direct Property Investment Association).

The new hires are expected to be predominantly business development managers, as well as asset management and administration roles, according to the survey.

The results highlight that PFA members are positive about the market outlook and are looking to cater for investment demand, Olde said.

Of those looking to make an acquisition, 37 per cent intended to do so through the purchase of an asset, and 10 per cent planned to acquire a fund or a business – significantly down from the previous survey when 75 per cent of managers were looking at mergers and acquisitions activity, he said.

“We think this is a solid sign that stability and confidence are returning to the sector,” Olde said.

More than 70 per cent of those raising capital intended to invest in the office sector, 42 per cent in industrial property, 28.6 percent in retail and 21.4 percent in residential, the survey found.

Just over half of respondents would be looking to source capital from private investors, half from financial advisers and institutional investors, 42 percent from high-net-worth and family office, and 42 percent from self-managed superannuation funds, the survey found.

 Several managers had reported successful capital raisings in recent months, which along with positive investor sentiment suggested that now may be the right time to re-enter the direct property market, Olde said.