the age article 1/9/09 on reit

Time to buy?

Mr Hall said Argo has bought shares in recent capital raisings from property companies, declining to name them.

The S&P/ASX 200 A-REIT Index has jumped 60 per cent since a record low in March, pushing its combined market value to $62.3 billion. Still, it remains 66 per cent below the record set in February 2007, before the credit crisis struck.

The property index is now trading at a price-to-book ratio, which measures shares relative to assets, of 0.86 compared with the S&P/ASX 200 Index at 1.90. A number lower than one means the shares are trading at less than the value of their assets.

“I see no sector where I am more likely to double my money over the next five years than the listed property trust sector,” Southern Cross Equities director Charlie Aitken wrote in a note to clients last week. “After the ‘meltdown’ comes the ‘melt up.’”

DYOR