from legg mason's nov report

from legg mason's november report, more info from

http://www.leggmason.com.au/en/pdf/monthly_reports/
LMPST_monthly.pdf

Profile
OVERWEIGHT POSITIONS ACTIVE %
Valad Property Group +4.8
Macquarie Office Trust +4.0
Macquarie CountryWide Trust +3.5
Macquarie Infrastructure Group +3.0
Dexus Property Group +2.7

The Macquarie satellites largely underperformed this month, as did
other geared A-REITs, as investors became a little more risk averse.
A number of these entities have added significant relative value to
the portfolio since March of this year and a little unwinding of
these gains at some stage was always on the cards. Encouragingly,
there was little negative news flow of note from these entities
during the month and we continue to see significant value in the
underlying property exposures of Macquarie CountryWide
(supermarkets and shopping centres in Australia, New Zealand and
the U.S.), Macquarie Office (high grade office buildings in Australia,
the U.S., Europe and Japan) and Macquarie Infrastructure (toll
roads in Australian and globally).


Valad Property Group is another leveraged A-REIT that has added
significant value over the past nine months but gave back some
ground this month. Again, there was no negative news during the
month. Indeed, the companys AGM was relatively upbeat as the
firm confirmed its strategy to improve earnings through growing
revenue and reducing debt importantly, the recent capital raising
has given the firm the time and means to pursue this goal.


Outlook

Despite lacking some direction over the past two months, we
continue to believe that the significant structural improvements
that A-REITs have implemented post the global financial crisis have
positioned the sector very favourably going forward, particularly
against global REIT peers.
A-REITs have reduced debt significantly and refocused on
traditional rental streams. As a result, A-REITs are poised to produce
strong margin expansion once revenue growth returns. While
shorter term vacancy issues and higher interest costs remain hurdles
to negotiate, the lack of new supply should support the sector in
the medium term.

As a measure of future expected relative outperformance, we
remain buoyed by the high level of dispersion in our portfolios
expected return relative to the wider A-REIT market. At present we
observe around four times higher than normal return to fair value
between our fund and the market. Opportunity at the stock level
remains high. This should produce above normal portfolio returns
and leads us to be very optimistic about the portfolios medium
term return prospects.