Sydney, June 7, 2007 AEST (ABN Newswire) - The Australian retail unlisted property fund sector increased by 26% in 2006, according to a comprehensive report just released by Property Investment Research (PIR). 'It has been the largest annual year on year growth in the sector's history' said PIR Associate Director Dugald Higgins, with the sector now boasting total assets of $21.6 billion, up from $17.1 billion last year.
The report, incorporates virtually all open and closed ended trusts available for retail investment.
Mr Higgins said several perceived trend shifts remain clear, including the growth of open-ended trusts over that of traditional syndicates, and an increase in hybrid funds. The average size of capital raisings was $103.4 million, up from $62.9 million in 2005, a 64% increase, with a continuing move into non-core property trust classes such as residential housing and agribusiness as well as a dominating trend into overseas property assets.
Mr Higgins said the continued growth of unlisted property funds and syndicates indicates the average Australian investor's appetite for property investment has not waned, as they continue to seek the benefits of professional management of quality assets in regulated investments.
Key facts
- Unlisted property funds sector now has assets of $21.6 billion, exhibiting average annual growth of 30.8% p.a. over the last 5 years.
- Average size of capital raisings are now much larger, jumping from approximately $62.9 million in 2005 to $103.4 million, indicating larger portfolios of generally higher quality properties.
- Growth of open ended unlisted trusts continued to outstrip closed ended syndicates, 8% p.a. growth for syndicates over 2006 as opposed to 67% for unlisted trusts; investors generally prefer vehicles which have an expanding asset pool and potential liquidity options.
- 2006 was the largest capital raising in the sectors history at $4.5 billion in new funds.
- All top ten funds by size have assets in excess of $300 million each, the top 4 are in excess of $500 million, the industry has greater diversification across its funds.
- 6 of the top ten fund managers (by size) have a diversity of fund types other than unlisted property, including Property Securities Funds and various types of Mortgage Funds
- Prevalence of Diversified funds is trending upward over the last three years while sector specific funds are declining (although still popular). Diversified funds made up 25% of funds by value in 2006.
- Fund evolution continues at a rapid rate, with an increasing focus on total returns rather than income yields in a compressed environment, also fund types are changing with the evolution of hybrid funds (direct and indirect property ownership), and further moves into non-core property sectors including residential subdivision and agribusiness assets.
- Allocation to offshore assets now makes up 14% of the total industry at over $3 billion compared to $1.8 billion in 2005.
For further information or a copy of the report contact Dugald Higgins, Associate Director, dugald.higgins@pir.com.au or Paul Henry, National Client Services Manager paul.henry@pir.com.au at PIR (03) 9670 7767.
Contact
Dugald Higgins
Associate Director
dugald.higgins@pir.com.au
Paul Henry
National Client Services Manager
paul.henry@pir.com.au
TEL: (03) 9670 7767
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