local reit's

Local REITs expected to lead recovery in Asia-Pacific

Florence Chong | April 02, 2009
Article from: The Australian

AUSTRALIAN listed trusts are expected to recover, along with those in Singapore and China, before other markets in the Asia-Pacific region, according to a property industry survey released yesterday.

In its 2008 Asia-Pacific Real Estate Investment Trust survey released in Singapore, Trust Company (Asia) finds that 37 per cent of respondents gave Australia a positive rating.

The annual survey covered 102 respondents from 77 companies in six countries, including fund managers, investment bankers and property owners.

Singapore achieved the highest score of 57 per cent as the market with the best overall REIT potential, while Australia and China had the second highest score of 46 per cent.

The global financial crisis had reduced the overall potential rating by an average of 12 per cent across the region.

The survey shows that the current global economic crisis has caused a dramatic turnaround in the short-term outlook for listed property trusts.

In all, 77 per cent of respondents now expect companies to stay the same size in the short term, compared with 7 per cent in last year's survey.

However, the long-term outlook is far more optimistic with 53 per cent predicting increases in the size of existing REITs, compared to 46 per cent last year.

In sharp contrast with 38 per cent last year, just 3 per cent of respondents expect new REITs to be listed in the short term.

The trust's managing director and chief executive, John Atkin, said investors would look for "plain vanilla" REITs in the short term. "It is back to basics with transparent structures and investments in strong regulatory jurisdictions back in favour," he said.