©2013 Investment Property Databank Ltd. All rights reserved. ipd.com 1 PFA Conference 2013 Commercial Property Performance IPD Australia and New Zealand 29 April 2013 PCA/IPD Pooled Property Fund Index - Unlisted Retail sponsors:
©2013 Investment Property Databank Ltd. All rights reserved. ipd.com 1
PFA Conference 2013
Commercial Property Performance
IPD Australia and New Zealand
29 April 2013
PCA/IPD Pooled Property Fund Index - Unlisted Retail sponsors:
©2013 Investment Property Databank Ltd. All rights reserved. ipd.com 2
• 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
©2013 Investment Property Databank Ltd. All rights reserved. ipd.com 13
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.
©2013 Investment Property Databank Ltd. All rights reserved. ipd.com 21
Enquiries
+61.2.9248.1900
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Anthony De Francesco
+61.2.9248.1901
Sanjeev Sahota
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Kimberley Slow
+61.2.9248.1903
Daniel Gordon
+61.2.9248.1909
Valerie Pontikakos
+61.2.9248.1902
Contacts at IPD Australia & New Zealand
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How to contact IPD around the world
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