Property fund secures double digit growth
Commercial property is delivering attractive returns for investors, with the Investec Australia Property Fund recording double digit growth.
The fund saw distribution growth of 12.7 per cent for the six months to 30 September 2015, with its chief executive, Graeme Katz, forecasting full year growth of between 10 and 12 per cent.
Katz added that the fund's weighted average lease expiry of 6.2 years was delivering sustainable income.
"These results are underpinned by the accretive acquisitions made during the period, fixed rental escalations built into property leases, cost containment and the fund's efficient capital and interest rate management," he said.
"Activity in the property sector remains strong as Australia continues to be seen as an attractive proposition for both domestic and offshore investors relative to other industrialised countries, due to the attractiveness of direct property yields and spread above funding costs, embedded contractual escalations and recent depreciation of the AUD against major currencies.
"Over 60 per cent of the prime industrial stock traded this year has been acquired by offshore capital. Following the conclusion of two significant portfolio transactions earlier in the year the market has seen an increased supply of stock for sale in recent months."
"The Fund is in line to achieve double digit distribution growth for the 2016 financial year, we have a quality portfolio which has been enhanced by accretive acquisitions and management remains focused on effective and efficient capital and interest rate management for the benefit of unitholders".
AUTHOR
Nicholas O'Donoghue
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