PFA Conference 2013 Commercial Property Performance · 2017-06-03 · Commercial Property Performance IPD Australia and New Zealand 29 April 2013 PCA/IPD Pooled Property Fund Index

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PFA Conference 2013

Commercial Property Performance

IPD Australia and New Zealand

29 April 2013

PCA/IPD Pooled Property Fund Index - Unlisted Retail sponsors:

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• Market Landscape

• Market Performance

• Market Themes

OUTLINE

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• Market Landscape

• Market Performance

• Market Themes

OUTLINE

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Property exposure and market coverage

Institutional grade property housed by UWPFs and A-REITs

▪ UWPF = Unlisted Wholesale Property Funds ▪ REIT = Real Estate Investment Trusts ▪ URPF = Unlisted Retail Property Funds

$91

$65

$14

$50

61% 85%

28%

43%

$0

$10

$20

$30

$40

$50

$60

$70

$80

$90

$100

IPD Mkt IPD Mkt IPD Mkt IPD Mkt

A-REITs UWPFs URPFs Other

Australian property investment marketestimated to be A$220 billion as at Dec 2012

Retail Office

Industrial Other

Market

Source: IPD Research.Note: percentages refer to market share.

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IPD Australian unlisted fund database

Comprised of wholesale and retail property funds

�AMP Capital Investors

�Charter Hall Group

�Colonial First State GAM

�DEXUS Property Group

�Eureka Funds Management

�Fortius Funds Management

�Goodman

�GPT Group

�INVESTA Property Group

�ISPT

�LaSalle Investment Management

�Lend Lease

�Mirvac

�QIC

�Valad

UNLISTED PROPERTY FUND INDEX DATABASE

�FUNDS: 85 �PARTICIPANTS: 37 �VALUE: $64 billion

�Abacus Property Group

�APN Property Group

�Arena Funds Management

�Aspen Group

�Australian Unity

�Blackrock Investments

�Centuria Property Funds

�Charter Hall Group

�Clarence Property

�CorVal Partners

�Cromwell Property Group

�Denison Funds Management

PARTICIPANTS: Wholesale Funds PARTICIPANTS: Retail Funds

�Federation Centres

�Folkestone Funds Management

�Forza Capital

�Investec

�Japara

�Kinsmen Securities

�MAB Funds Management

�Mair Property Funds

�Opus Capital Group

�Sentinel Property Group

�Stockland

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Fund exposure across property sectorsREITs and wholesale funds index skewed towards retail sector, retail funds index

skewed towards office sector

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Sector composition of unlisted property funds

URPFs weighted towards secondary grade assets

UWPFs: 75% prime / 25% secondary URPFs: 14% prime / 86% secondary

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• Market Landscape

• Market Performance

• Market Themes

OUTLINE

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Return performance across property vehicles

REITs capital growth outperforms unlisted funds

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Trends in return performance across property

structures

Return profiles differ across investment structures

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Unlisted retail property funds performance

Returns moderating but underpinned by strong distributed income

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• Market Landscape

• Market Performance

• Market Themes

OUTLINE

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Relative pricing across property sectors

Cap rates to remain generally steady over the short-term?

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Varying cap rates across property vehicles

Cap remain steady as cost of debt decreases

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Investment flows trending up for unlisted funds

URPF experiencing fresh new equity capital while funds continue to deleverage

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Trends in gearing across property vehicles

Gearing trends vary across property vehicles

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The impact of gearing on investment performance

Significant rise in downside risk with gearing level s over 10%

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Management fees to align with investment return

performance

Ongoing pressure on unlisted fund managers to reduce management fees

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Investment performance reporting

Asset portfolio performance versus fund performance

-15%

-10%

-5%

0%

5%

10%

15%

Dec-08 Jun-09 Dec-09 Jun-10 Dec-10 Jun-11 Dec-11 Jun-12 Dec-12

Other fund variables

Other assets & liabilties

Fees

Cash

Debt

Direct property

Fund return

Direct property

Time series reconciliation analysis: components of NAV fund return

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Unlisted infrastructure fund returns

Infrastructure viewed as a competing asset class to property

� As at December 2012, annual total return was 9.8% comprised of a 3.9% distributed income return and 6.1% capital return.

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Enquiries

+61.2.9248.1900

www.ipd.com

Anthony De Francesco

+61.2.9248.1901

anthony.de.francesco@ipd.com

Sanjeev Sahota

+61.2.9248.1910

sanjeev.sahota@ipd.com

Benjamin Martin-Henry

+61.2.9248.1904

benjamin.martin.henry@ipd.com

Mitchell McCallum

+61.2.9248.1905

mitchell.mccallum@ipd.com

Benjamin Wyburd

+61.2.9248.1907

benjamin.wyburd@ipd.com

Lachlan Wood

+61.2.9248.1906

lachlan.wood@ipd.com

Kimberley Slow

+61.2.9248.1903

kimberley.slow@ipd.com

Daniel Gordon

+61.2.9248.1909

daniel.gordon@ipd.com

Valerie Pontikakos

+61.2.9248.1902

valerie.pontikakos@ipd.com

Contacts at IPD Australia & New Zealand

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Global enquiries

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How to contact IPD around the world

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