Colonial grows exposure to global and emerging market property
Allocations toward global listed property are continuing to increase within retail investment portfolios in Australia and internationally, according to ColonialFirstState’s (CFS) global asset management division.
John Snowden, CFS head of property securities, pointed to CFS figures indicating 70 cents of every new dollar invested in Australian property trusts is going to overseas assets.
He said domestic property investment opportunities have become increasingly scarce in Australia over recent years, due largely to our high rate of securitisation of commercial property, which is one of the highest in the world.
In response to this, many Australian listed property trusts (LPTs) have significantly increased exposure to listed assets in global markets, including the US, UK and Europe.
Snowden estimates most Australian LPTs have over 45 per cent of their portfolios in overseas assets, and expects this will exceed 50 per cent within the next 12 months.
Recognising the globalisation of property assets, CFS recently appointed two property analysts from the US: Barry Oxford, senior portfolio manager, and Marc Lederman, property portfolio manager, who will be responsible for picking property assets within North America.
This means CFS now has global property analysts on the ground in London, Sydney and New York, and it has also recently begun looking at emerging market economies with renewed interest.
Specifically, it has been conducting on the ground research in Russia, China, India and Brazil with a view to adding property assets from these areas to its global property portfolios.
Snowden also indicated the relatively low amount of property securitisation within some areas of Europe, including Germany, Italy and even Finland, means they have strong investment potential.
“There are many investment grade opportunities in Europe [which are] privately owned, so there are significant opportunities to securitise,” he said.
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