FYI
http://business.smh.com.au/business/investors-eye-fire-sales-of-reit-assets-20090311-8v3t.html
Investors eye fire sales of REIT assetsCarolyn Cummins
March 11, 2009 - 5:55PM
A swathe of property asset sales are anticipated in coming weeks as private investors enter the market to snap up prime office, retail and industrial building at bargain-basement prices.
Amid the expected deals will be the launch of large-scale marketing campaigns in newspapers for prime properties as banks and financiers apply the blow torch to real estate investment trusts (REITs) to prove they are serious vendors.
A year ago when the market was turning sour, much of the $20 billion of assets up for sale were taken off the public notice board, as it was perceived as desperation campaigning.
But, with REITs hitting all-time lows, banks have said they wish to see, via public ads, that the assets are being marketed in the public arena - such as GPT's recent campaign to sell its 11 resorts and hotels.
In total about $200 million, of the $20 billion of assets on the market, could change hands in the near term.
It is tipped that some may go to foreign buyers and private investors, who have more access to capital.
This comes as vendors say they are starting to get interest in a number of Sydney CBD's office assets.
According to Simon Wheatley at Goldman Sachs JBWere, while the proposed sale of No.1 Martin Place, jointly owned by Macquarie Group's listed and unlisted REIT, is still in limbo, there are suggestions that interest in Dexus Property's 343 George Street, 11-storey, B-grade office building is quite strong. It was last valued at about $55.6 million.
GPT's wholesale fund is said to be concluding a sale of its 179 Elizabeth Street, worth about $70 million to $80 million.
The broker said there was also interest being shown in the North Shore market, encompassing St Leonards, North Sydney and North Ryde, on yields between 8.5% to 9.5%.
"The continued listing of assets below the $100 million and closer to the $50 million mark highlights some depth of demand from smaller investors for yield product in this range and the preference for REITs to use their smaller assets as liquidity/trading stock to top up cash balances. We also understand REITs remain very unwilling to talk on selling their core assets at this point,'' Mr Wheatley said.
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