nothing we don't know already but on a slowpost kind of week...

nothing we don't know already but on a slowpost
kind of week here it is anyway gltah


As favourable economic indicators continued to emerge and the recent company reporting season was generally well received, investors continued to support A-REITs given their leverage to an improving economy. Standout performers this month included ING Industrial Fund (+29.3%), Valad Property Group (+26.0%) and Mirvac Group (+18.3%).


Valad gained ground as it successfully completed a heavily oversubscribed institutional capital raising during the month; the proceeds will be used to pay down liabilities.

The Legg Mason Property Securities Trust outperformed its
benchmark by 1.9% over the month. Portfolio performance
over the past seven months is now 17.5% ahead of benchmark.

The outperformance of Valad Property Group (+26.0%), as well as participation in the firm’s placement, was the main contributor to the portfolio’s relative performance over the month.

In the case of Valad, investors have become much more
comfortable with the firm’s ability to manage its debt obligations through the release of equity transactions and asset sales. Simply put, the stock has recovered significantly from an oversold position.

A catalyst for the re-rating of Valad was the July restructure of its European property holdings with Bank of Scotland. The restructure protects Valad’s Australian tangible asset base and frees up cash flow from its funds management platform.


Outlook
We have been encouraged by the ability of A-REITs to adjust
quickly to the new capital environment. In particular, the asset class has reduced debt significantly and refocused on traditional rental streams. We see this as a critical development that leaves the sector well positioned going forward. While there are some headwinds to negotiate, notably some shorter term vacancies and high interest
costs, the lack of new supply should support the existing pools of property capital stocks.

Though the strong recent performance of the sector has tempered the overall return outlook of A-REITs, we maintain that there are significant opportunities in selected underlying securities. We have observed a significantly higher than normal dispersion in our investment signal, which is a clear indicator of increased opportunity. This, combined with the turning point observed in markets over the past six months, leads us to be very optimistic
about the medium term return prospects for the portfolio

for more info

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