Property Funds

• The Australian listed property trust (LPT) sector (otherwise known as the property securities sector) continues to provide investors with strong yields, reasonable diversification and high quality property assets.  
• However a high number of recent mergers and acquisitions have considerably reduced the number of investment opportunities. The five largest LPTs comprise about 65% of the sector, and the Westfield Group alone accounts for about 30%.
• There is also a shortage of investment grade property in Australia, and 40% of assets that the Australian LPTs invest in are already located offshore.

What are the main differences between the Australian and international listed property markets?

• Australia has the most highly developed listed property market in the world, with two thirds of the institutional grade property being held in LPTs.  This compares to 12% in the US and only 2% in Europe.  The market value of Australian LPT sector is approximately A$88 billion compared with over A$1.42 trillion globally.  
• Globally, there are over 450 global Real Estate Investment Trusts (REITs) (the equivalent to LPTs) and management companies to choose from.
• Another important benefit is that the global market is more diversified - 27% Office, 25% Retail, 24% Diversified, 13% Residential, 6% Industrial and 5% Hotels^. In Australia, around 45% of LPT assets are in the retail sector and the residential sector is not represented at all.

What growth potential is there in the securitisation of property?

• Global listed property markets have been growing at 10% pa over the past 10 years and this is expected to continue.  This trend may be aided by the fact that global property securities have been providing similar returns (or better in several markets) to global shares over recent years.
• The growth in the securitisation of property assets has fuelled the rapid growth of Asian property markets in recent years and is set to do the same across Europe. 
• The potential of the European property market is enormous.  Only 2% of European commercial real estate is securitised.  Applying the level of securitisation of more mature property markets (such as the US and Australia), the European market has the potential for huge growth.
• Why consider Colonial First State Colliers International Property Securities Fund?
• The strategic alliance between Colonial First State and Colliers International combines Colliers International’s global property research capabilities with Colonial First State’s investment management expertise and processes to provide a unique investment opportunity.
• Colonial First State’s Australian LPT funds management capability has a strong track record.  Our local expertise is now being leveraged in the wider global markets.
• Colliers International is one of the leading commercial real estate organisations in the world.  It is highly active in property management, valuation, sales and leasing in over 240 offices in 51 countries.

At a glance, Colonial First State Colliers International Property Securities Fund:

• Delivers active security selection
• Does not hold underweight positions in order to align with an index
• Holds a minimum of 25 stocks
• Has no core regional allocation
• Picks and invests directly in securities appropriate for Australian investors, typically in countries with a double taxation agreement or tax treaty
• Holds international securities directly, that is, it is not a ‘fund of funds’
• Is focused on maximising the total return and does not separate income and growth objectives.

How do you access the Colonial First State Colliers International Property Securities Fund?

The fund is available through FirstChoice, Colonial First State’s platform which provides a complete investment portfolio solution across Investments, Personal Super and Pension.

You should read the Product Disclosure Statement (PDS) and consider seeking financial advice to determine if it is right for you.

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