Listed property booms in 2000

Listed Property Trusts (LPTs) were back in favour in 2000, recording a 17.2 per cent return compared to the All Ords 7.4 per cent for the year.

The top-performing sector was diversified trusts, giving a 26.3 per cent return, says Tim Church, director of corporate services at JB Were. The poor performer was hotel trusts, which gave a negative return of 2.6 per cent for the year.

"The top-performing trust was Stockford, with a 30.4 per cent return and the worst was Australian Growth Properties with a -22 per cent return," Church says.

For investors, the LPT sector is becoming limited due to the lack of new trusts and consolidation among the existing listings. Church says the top five trusts account for 50 per cent of the index, but he believes consolidation will slow down and new offerings will boost investment choice again.

LPTs were the dominant player in property investment during 2000.

According to JB Were, there was $3.5 billion of property transactions by LPTs during 2000. This compared to $1.7 billion of property bought and sold by institutions, while syndicates traded $3 billion of property.

In 2001, Church says the office sector of LPTs looks good for healthy returns and he expects to see more small cap trusts come into the market.

J B Were's investment recommendations for LPTs in 2001 are: Mirvac Group (majors); Centro Properties (retail); Commonwealth Property Fund (office); Macquarie Goodman Industrial (industrial); and AXA Australia Diversified (diversified).