MELBOURNE: Fat banking fees, lots of merger activity and happy stockholders. Australian property companies are becoming a rare hot spot in the world of finance.
Tuesday, April 1st 2003, 9:13PM
by The Landlord
The companies are on an acquisition binge that shows no signs of slowing down, and are hungry for new capital. That makes them a goldmine for dealmakers starved for business.
"It's a very good sector for the investment banks with all the capital raisings," said fund manager Andrew Stubing, head of Deutsche Paladin's listed property trust team.
At the same time, Australian property stocks have been star performers in an otherwise dreary market and are touted as top picks for investors in search of safe havens...
The S&P/ASX 200 property index is up four per cent since the start of last year against a 17 per cent fall in the broader market. The move is partly driven by Australia's greying population putting money into defensive assets.
The $A45 billion Australian property sector now makes up a hefty eight per cent of Australia's benchmark S&P/ASX 200 index with 28 listed retail, office and industrial property trusts, compared with a one per cent weighting in the US market.
Trusts are required to pay out all earnings to unit holders, so when they want to buy new properties or make acquisitions, they have to turn to the market for financing.
