Property stocks outlook remains good for 2010, says Fidelity
Property stocks were among the best performers in global equity markets in 2009 and the outlook remains good for 2010, according to Fidelity.
“We can expect a further and steadier recovery in real estate markets and property stocks in 2010 due to improving fundamentals,” said Fidelity Global Property Securities Fund portfolio manager Steven Buller, who added that the outlook is good as occupancy rates and rental levels are improving around the globe.
Buller said supply and demand also look very positive.
“It is uneconomical to build new developments at present and difficult to secure finance. This means that the supply side is quite tight. And as the global economic recovery continues, so too will demand,” he said.
Investors are therefore re-entering the market to invest in prime assets, Buller said.
He said property returns remained closely correlated with credit spreads and financials, as a significant part of property investment is debt financed, adding that the cost of and access to finance has improved and there are pools of cash sitting with asset allocators and institutions waiting to be invested.
Buller said while there were opportunities, he expected the volatility of property stocks to remain in contrast to the underlying stability of cash flows from physical property assets.
Recommended for you
Platinum Asset Management has provided an update on the possibility of a merger with asset manager L1 Capital following a period of due diligence.
Commentators may be forecasting consolidation in private market firms but a survey of the industry itself expects new manager formation will still outpace this, especially in Asia Pacific.
Fund manager Pacific Current has appointed a former superannuation chief executive as its newest chair, succeeding Tony Robinson who departs after almost a decade to focus on his role at COG Financial.
The possibility of a private credit ETF is looking unlikely for now with US vehicles seeing limited uptake, according to commentators, but fixed income alternatives exist that can provide investors with a similar return.
