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GPT returns to the funk and flaresXchange
March 9, 2009 Page 1 of 2 Single page view

The price of the property trust's units have slipped into a psychedelic time warp.


THE last time Australia's oldest property trust, GPT, was trading below 50c was on September 30, 1974 when it hit 46.8c a unit. That was more than a generation ago and probably before most of today's traders were even born.

In the current era of doom and gloom, its management can only dream of those days of flares and funky music. The stock was hammered again yesterday, closing 14.81 per cent lower at 23c, thanks to the worsening sentiment towards listed real estate investment trusts.

GPT was in good company. Frank Lowy's Westfield fell 3.3 per cent to $8.90, its lowest share price since the shopping centre magnate combined all his listed property trusts in 2004.

And Goodman Group slumped 13.9 per cent to the unheard-of pits of 15.5c.

There were many theories about the rout, but analysts said yesterday's selling was a combination of domestic REIT investors sitting on low cash levels and needing to free up some dollars.

Global REITs tend to tap Australian funds for deeply discounted raisings in Britain and Asia. As if that's not enough, local equity funds have lost too much money on the recent Westfield, Goodman, GPT and Mirvac capital raisings, and have been selling down their exposures.

It seems many institutions are yet to be convinced by predictions that the residential sector could make a sustainable bounce soon, despite some positive commentary at the recent interim results about better inquiry and trading volumes for the lower end of housing and land early this year.