This article is from the Australian Property Journal archive
FOLLOWING a strong performance in August, Australian real estate investment trusts returns declined marginally in September whilst commercial property cap rates continue to trend upwards, according to Atchison.
The latest Atchison Market Review September report shows the S&P/ASX 200 Property Accumulation index returned -1.5%, compared to 7.9% in August.
For the 12 months, AREITs returned -16.6% underperforming the market, which returned -10.2%.
The winners were diversified and office AREITs which returned 0.4% and 0.1%, respectively.
Surprisingly industrial AREITs posted negative returns of -1.8%, whilst retail AREITs continues to underperform with returns of -3.4%.
The best property trusts performers over the month were Abacus Property Group with 4.7% and Mirvac with 3.3%.
At the end of the month the index was trading on a dividend yield of 5.0% with a P/BV 1.1x and a P/E Ratio 17.4x.
Australian direct property continues to post positive returns, albeit lower of 0.8% return over three-month period to September, down from 1.8% over the three months to August.
Atchison warns that investors should continue to see downward revaluation of the direct property sector. Recently Oxford Economics said Australian banks are at risk of falling commercial real estate values.
Meanwhile the report found capitalisation rates across property sectors continued to trend upwards. Cap rates across office, industrial and retail properties range are 5.1%, 5.3% and 5.3% respectively.
In August, office, industrial and retail cap rates were 5.0%, 5.3% and 5.0% respectively.
Globally, REITs returned -2.4% over the month of September. In USD terms the top performing region was New Zealand (-0.3%) followed by Singapore (-1.0%). The worst-performing region over the month was the United Kingdom (-8.8%).
