Australian property syndicates graded
More than $30 billion has been invested in the burgeoning syndicated property market in the past three years, according to a new report by Property Investment Research (PIR).
TheAustralian Property Syndicate Review 2001,the first comprehensive study of the Australian syndicated property market, found that more than 600,000 investments had been made into managed property funds or syndicated property.
PIR managing director Richard Cruickshank says the report seeks to provide financial planners and property professionals with information on property syndicates which previously was difficult to obtain because of obscurity of the schemes or lack of public information available.
The report provides a rundown on the property investment managers working in the industry. It also looks at the various property syndicates currently in operation throughout Australia and how they’re performing. Some of this information has been provided from ASIC in updated balance sheets.
Director and author of the report Anton Lawrence says the major findings are that office assets are outperforming all other property. Retail centres appear to be solid, while retirement villages are “a bit choppy”. Residential subdivisions are also doing “fairly well”, but Lawrence points out that this is still a “left field” area in property syndication and says he would be cautious to make any hard predictions as it is still early days.
Another finding, Lawrence says, is that while there are no “Don Bradman” averages of syndicates per manager with better returns than the prospectuses, about half of the managers are able to offer an 80 per cent chance that the investment will return above prospectus.
But because of the relative youth of the industry, there appears to be no correlation between size of manager or investment and performance.
“Just because you’re big, doesn’t mean you’re going to perform well,” Lawrence says. “There is no correlation between size of the manager and performance, and nor is there correlation between size of the syndicate and performance.”
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