The Asian listed property sector displayed a gain of 6.7% in August 2006, thereby raising its year-to-date performance to +12.3%. It was the best performing continent last month, while it remained unchanged in July 2006.
The main drivers behind this result were Singapore and Japan that posted a gain of 11.7% and 8.5% respectively. Hong Kong (+2.1%) also displayed a positive performance, whereas the Philippines (-2.5%) was the only Asian country showing a loss. In a relative perspective, the Asian listed property sector outperformed both general equities and bonds by 2.8% and 5.0% respectively.
The Oceania listed property sector displayed a gain of 3.7% in August 2006, thereby raising its year-to-date performance to 13.5%. Australia gained 3.7%, and New Zealand lost 0.7%. The South African listed property sector surged 11.2%, after several months of negative performances.
Westfield Group is gauging investor interest in an AUD 2bn Australian unlisted property fund to increase earnings from management fees and ignite its lagging share price. The decision whether to proceed or not will be made by November 2006, according to its CEO Mr Frank Lowy. The fund would include stakes in
malls located in Australia. Westfield Group is also considering starting an unlisted fund in the UK, where it owns seven malls and developments such as White City, to be London’s biggest shopping centre once completed in late 2008 and an US unlisted fund may also be considered.
Challenger Financial Services Group proposes to establish a listed property trust. The company has commenced marketing the trust to institutional investors in Australia and Asia, and the trust is slated to list on 23 October 2006. It will hold over AUD 500m worth of commercial, retail and industrial property in Australia.
Investors will be offered a total of 327 million units in the trust, priced at AUD 1.00 a piece. Challenger Financial Services Group itself will hold a stake of up to 40% in the trust.
The Dubai Financial Services Authority announced rules to permit the operation of REITs within the Dubai International Finance Centre with effect from the beginning of August 2006. The rules follow the approval on 1 August 2006 of the Investment Trust Law, DIFC Law No. 5 of 2006.
Under these rules it will be possible to issue REITs for the first time in this region, utilizing the facilities of the DIFX. Dubai is the second largest emirate in the United Arab Emirates. Cathay Financial Holding Co., Taiwan’s biggest financial services company, received an approval to sell its second REIT to buy buildings in Taipei’s commercial district.
The Financial Supervisory Commission approved the company’s plan to raise as much as TWD 7.2bn in a sale of investment trust funds, or REIT.
By Global Property Research.*