Welcome to this week’s Property News.
This week I spent some time reviewing the REIT results announced over the last few weeks and particularly the factors which contributed to the growth in REITs over the period.
The listed property groups grew their Assets Under Management in FY21 by 12% (+$42bn) to $372bn with Charter Hall, Dexus and Centuria leading the charge. Most of this increase (approx 5.7%) was due to increases in valuations, which as you’d expected was concentrated on the warehouse & logistics markets. M&A Activity accounted for a net $5.6bn with the addition of the AMP Capital Diversified Fund moving across to Dexus. Refer to our full article here.
The management of the $7bn AMP Capital Wholesale Office Fund may also find its way into a listed entity with Charter Hall, GPT, Mirvac, Stockland and Dexus all pursuing the opportunity. QIC also emerged this week as one of the final six candidates, however as each group will no doubt put forward very compelling and very different proposals, the independent advisory committee will find it very hard to recommend the most compelling for its investors, who each have differing views and requirements to contend with.
My view is the Dexus is the most logical manager to take the Fund and its investors forward under new management.
On the COVID front, it looks obvious to me that Sydney and Melbourne’s lockdown will extend to the end of October with fully vaccinated people likely to enjoying some easing of restrictions before they are eased for all. Retailers therefore face a tough lead up to Christmas. Many small retailers, especially those with a limited online presence, will be holding excess stock from winter and have limited capacity (or desire) to stock up for Christmas, placing more stress on the sector.
With the Government now preparing to issue vaccination passports for international travel and the State Government contemplating ways to open up safely, individual business owners, as well as managers of enclosed shopping centres (or State Premiers for that matter) who currently have a right to ban people from entering a premises (or a State), need to consider how to serve people who are not fully vaccinated.
Personally, I am not in favour of excluding people who choose not to be vaccinated (each of us need to live with our own decisions) and I expect that after the lockdown is over (and 80% of people are vaccinated), the Government will remove all restrictions and allow most businesses to welcome anyone through their doors.
If you have any news, information or research reports you’d like us to share with the market, please feel free to send me an email at info@propertymarkets.news or simply submit an article for us to review here.
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