AMP Capital Investors and Centro have taken over Macquarie Bank and Colonial First State as the second and third largest property asset manager, according to Property Investment Research.
According to the 2007 PIR Australian Property Funds Industry Survey, AMP Capital Investors climbed from fourth to second position with $26.41 billion and Centro from fifth to third position with $22.98 billion of assets under management.
Meanwhile, the property funds industry is burgeoning and shows no signs of abating. Total assets under management jumped by $80 billion over the last 12 months to $356 billion.
PIR’s head of client services Paul Henry said the growth represents a 29% increase since the last survey in 2006 and a compound annual growth of 20.7% since 2000.
At this rate of growth, Henry said the industry will exceed $500 billion within two years.
“The sector continues to outperform and the sustained growth shows continuing support for property investment in this country despite some negative sentiment surrounding contracting yields and an overvalued listed sector.
“The substantial growth in the property funds industry is reflected by the expansion in both direct and indirect property assets. The LPT sector continues to shine with assets under management having increased by 23%,” he added.
The latest survey also confirms that Australand LPTs are indeed becoming a rare breed (Australian Property Journal May 28, 2007: Aussie LPT’s – A Rare Breed http://www.propertyreview.com.au/news/28/ARTICLE/3269/2007-05-28.html).
According to Henry, the growth has been largely driven by acquisition of overseas assets in an environment where accretive Australian assets are less common.
“International property was a big mover in the 2007 Survey, with dedicated international property funds increasing by 75% on the previous year’s level. Additional offshore investments have taken this sector beyond the $A33 billion level, bigger than the Mortgage Securities sector,” he added.
The top 10 fund managers have the lion share of the market, overseeing just over $207.47 billion worth of assets out of the $356 billion.
The table below shows the top 10 Australian Property Fund Managers by their total property funds under management in 2007.
Fund Manager | 2007 Ranking | 2006 Ranking | Total Assets ($m) | Percentage of Total Industry |
Westfield Group | 1 | 1 | $49,291.00 | 13.80% |
AMP Capital Investors Limited | 2 | 4 | $26,413.60 | 7.40% |
Centro Properties Group | 3 | 5 | $22,983.40 | 6.40% |
Macquarie Bank Limited | 4 | 2 | $21,070.80 | 5.90% |
Colonial First State Group | 5 | 3 | $20,779.70 | 5.80% |
GPT Group | 6 | 8 | $13,461.90 | 3.80% |
DB RREEF Funds Management Limited | 7 | 6 | $13,337.50 | 3.70% |
ING Group | 8 | 7 | $13,169.80 | 3.70% |
Stockland Trust Management Limited | 9 | 10 | $11,687.30 | 3.30% |
Mirvac Group | 10 | 9 | $11,272.20 | 3.20% |
Total | $203,467.20 | 57.00% | ||
Source: Property Investment Research | ||||
Meanwhile, the unlisted retail sector has also grown by 28% over the past year.
PIR’s associate director Dugald Higgins said this will result in a further swing away from syndicates toward open ended property trusts as investors call for greater liquidity and diversification.
Over the past year Wholesale Property Securities Funds have increased in size by 42%.
“This has primarily been driven by the weight of superannuation contributions seeking managed exposure to property assets, but is also indicative of the performance of the underlying LPT’s.
“Mortgage funds only grew by 12% over the past 12 months having been adversely affected by negative sentiment in the industry over the past 12 to 18 months. 2006 saw the increasing emergence of Hybrid funds comprising a mix of direct and indirect assets,” he added.
Higgins said the greater liquidity and diversification appear to have struck a chord with investors and the sector has grown, from a small base, by 142% over the 12 months.
Australian Property Journal
