Property performance unlikely to repeat, says Zenith
Zenith Investment Partners investment analyst Jonathan Baird has warned investors not to expect a repeat performance from property this year.
The listed property sector performed strongly over the 12 months to May 2013 both locally and globally. The S&P/ASX300 (A-REIT) Index rose 30.62 per cent and the FTSE Developed Rental Index returned 25.55 per cent, Zenith’s sector report found.
However, the strong returns experienced over the last 12 months were unlikely to play out over the next 12 months, according to Baird.
“Many managers have indicated that the sector’s strong returns over the past 12 months have increased the number of securities trading above fair value, and therefore the magnitude of returns over the past 12 months are unlikely to be replicated in the coming year,” he said.
Baird said investment team turnover continued to plague the sector, with a “domino effect of changes” impacting its rated managers.
Of 78 property products, Zenith rated six highly whilst 18 gained “recommended” status and 12 were granted an “approved” rating.
Baird said managers had moved back towards traditional business models - as seen in the return of REITs - which has driven confidence in the sector.
Recommended for you
Australian fund managers are actively seeking to launch Cayman versions of their funds to attract offshore flows, with Regal Partners set to launch its latest offering this month.
As private markets gain traction in Australia but only a limited pool of talent is available, three recruiters explore whether fund managers should consider looking overseas to find top talent.
With an explosion of private credit managers appearing in the market, two alternatives experts believe a consolidation is needed to maintain the quality of the sector.
Bentham Asset Management has become the latest fund manager to expand its distribution team as it reports increased interest in its credit strategies.
