The Australian Listed Property Market is the worst performing sector in the Asia Pacific region, according to the latest update from Global Property Research.
According to GPR, local total returns for the Australian market fell 0.9% in March, resulting in a return of only 1.4% year-to-date.
The GPR March 2006 Update show three Australian LPTs were amongst the top five worst performing companies in the Asia Pacific region.
In March, Centro recorded a negative 5% in total returns followed by Westfield at negative 4%.
Surprisingly, which has been the poorest performing trust over the last 12 months, according to the Property Investment Research April 2006 Update, recorded a negative 3% in total returns for the month of March.
PIR’s head of listed securities Paul Pavlidis said the LPTs market has been going on strength to strength in the past 12 months and has only softened in the past two months.
“It is not an indictment of Centro and Westfield, because both companies have recorded strong growth over the past year. Centro has run quite hard and peaked in early March 2006.
“From February 2005 and February 2006, before the fall, Centro returned 53.8% to investors. Furthermore, there are no recent negative announcements to suggest why Centro shares have fallen 7.2% from $6.90 on March 8 to $6.40.
“It would seem investors have decided to take their profits and move on from LPTs,” he added.
According to the GPR March 2006 Update, the Australian LPTs market was among the three worst performing countries in March, which included Malaysia and Philippines, both countries are debutants to Real Estate Investment Trusts.
In March, the best performing REIT market were Japan and Singapore. Total returns for Japan was 10.8% while Singapore was 10.7%.
However, in the first quarter of 2006, Singapore was the best performing country with 27.9%, ahead of Hong Kong with 13.4%, and Japan with 11.9%.
The Asian REIT market posted a gain of 9.4% in the past three months.
Historically, the GPR March 2006 Update shows the Australian LPTs market picks up its pace in the long term.
In the past, total returns for the Australian LPT was 8.7% for six months.
Historic data also showed, in the past one to five years, total returns for the sector were between 16% and 18%.
In the past, the Japanese, Hong Kong and Singaporean markets took charge in the Asia Pacific region.
The GPR March 2006 Update shows, in the past one year, total returns in Japan were 86.4% and 66.4% at Singapore.
In the meantime, the GPR March 2006 Update said Singapore is looking to snatch the title of the financial centre for REITs.
“Temasek Holdings’ CEO argued that the Singapore government should consider cutting tax rate local corporate investors pay for the property trust dividends.
“This measure would match the incentive that is offered to overseas shareholders.
“These tax incentives are offered to investors to encourage the development of the property trust market in Singapore as it competes with other Asian countries in order to become and remain the financial center for REITs,” the report added.
By Nelson Yap
