SMSF trustees opt for higher returns with direct property
Self-managed superannuation fund (SMSF) trustees are looking to direct property funds to provide returns in the current low interest rate environment, Charter Hall reports.
The property fund manager's head of direct property, Richard Stacker revealed that Charter Hall's Direct Office Fund (DOF) has raised $175 million since it was launched.
"There has been a noticeable increase in interest from SMSF trustees in this low term deposit environment," Stacker said.
"With the expectation that the Australian economy is likely to be in a low interest rate environment for some time, three-year term deposits at 3 per cent and the ASX 200 Dividend Yield at 4.5 per cent, interest in direct property, which is providing year one income yields of 7 per cent or more, generated from conservatively geared, strong tenant covenant investments, are attracting strong flows."
DOF fund manager, Steven Bennett revealed the fund had recently purchased a new 19,000 square metre office tower in Brisbane's Fortitude Valley, which was pre-leased to Aurizon (formerly Queensland Rail) on a 12-year lease, in a partnership with Charter Hall's Core Plus Office Fund.
Bennett said the DOF, which is "strategically weighted to the Sydney and Melbourne office markets", was now valued at $675 million.
AUTHOR
Nicholas O'Donoghue
Recommended for you
The Federal Court has dismissed a conflicted remuneration case brought by ASIC against the director of life insurance distributor Freedom Group, where Bali holidays and Vespa purchases were among sales incentives.
Policy and advocacy specialist Benjamin Marshan has left the Council of Australian Life Insurers after less than a year, having joined in March from the Financial Planning Association of Australia.
The declining volume of risk advisers meant KPMG has found a rising lapse rate for insurance policies arranged by independent financial advisers, particularly in the TPD and death cover space.
The Life Insurance Code of Practice has transferred from the Financial Services Council to the Council of Australian Life Insurers.
