Property as safe as houses

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In uncertain times like these, shares in quality property companies come into their own.

Monday, March 31st 2003, 6:30PM

by The Landlord

Usually property stocks are among the most boring on the market. Their share prices don't move around too much but are usually underpinned by steady profits and reasonable to high dividends.

Because of this, many people include property shares in their portfolios: the better companies offer a much better return than, for example, government stock. Against this, the shares rarely excite with either takeover activity or unusual profit surges. People wanting stocks that outperform tend to look elsewhere.

As usual, share prices in the sector have been reasonably steady while the market as a whole has been under pressure. Many see this sector as a safe haven given the Iraqi war and global uncertainties and the prospect that interest rates could fall, lowering the companies' borrowing costs.

Examples include: Capital Properties which was selling at 90c on Tuesday (these shares have this year range traded between a low of 84c and a high of 91c); Colonial First State $1.10 (range $1.97 and $1.15); Calan Healthcare 78c (76c and 82c); Kiwi Income Property Trust $1.06 ($1.03 and $1.06); Property for Industry 91c (86c and 97c) and Trans Tasman 25c (24c and 30c).

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