Property trusts cashing in
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Tuesday, 1 August, 2000 - 22:00
TAX-loss selling and ‘window dressing’ have contributed to the recent strong performance of the listed property trust sector, according to a monthly report by Property Investment Research into the industry.
“Window dressing can be described as the process whereby fund managers engage in a last minute rush to include stronger performing stocks in their investment portfolios prior to the conclusion of the financial year,” the report said.
“Given the out performance of the LPT index for calendar year 2000, property trusts became a must for many a fund manager looking to impress existing and potential investors with a portfolio of winners.”
This positive sentiment has been capitalised on by some trust mangers who have used the opportunity to raise further funds.
AXA Australia diversified and Mirvac Property Group and Centro Properties Group have announced equity raisings.
There are still some threats to the sector.
“A backlash following the introduction of the GST and a post-Olympic slowdown still loom as key threats to sustained economic growth in Australia,” the report indicated.
A recent survey by Jones Lang LaSalle suggested that retail trusts stood to suffer the most from an anticipated slowdown.
The top LPT June performer was Commercial Investment Trust which increased 34 per cent. The next highest was Global Property Fund which increased 11 per cent during the month.
Thakral Holdings Group was the worst performer. Its unit price fell 15 per cent in June, followed by Grand Hotel Group with a 10 per cent decline.
In the diversified sector Advance Property is about 9 per cent under true value, according to PIR, while in the retail sector Armstrong Jones Retail Fund is 8 per cent under true
value.
“Window dressing can be described as the process whereby fund managers engage in a last minute rush to include stronger performing stocks in their investment portfolios prior to the conclusion of the financial year,” the report said.
“Given the out performance of the LPT index for calendar year 2000, property trusts became a must for many a fund manager looking to impress existing and potential investors with a portfolio of winners.”
This positive sentiment has been capitalised on by some trust mangers who have used the opportunity to raise further funds.
AXA Australia diversified and Mirvac Property Group and Centro Properties Group have announced equity raisings.
There are still some threats to the sector.
“A backlash following the introduction of the GST and a post-Olympic slowdown still loom as key threats to sustained economic growth in Australia,” the report indicated.
A recent survey by Jones Lang LaSalle suggested that retail trusts stood to suffer the most from an anticipated slowdown.
The top LPT June performer was Commercial Investment Trust which increased 34 per cent. The next highest was Global Property Fund which increased 11 per cent during the month.
Thakral Holdings Group was the worst performer. Its unit price fell 15 per cent in June, followed by Grand Hotel Group with a 10 per cent decline.
In the diversified sector Advance Property is about 9 per cent under true value, according to PIR, while in the retail sector Armstrong Jones Retail Fund is 8 per cent under true
value.