New property market to expand

The Australian Exempt Property Market will shortly announce new managers joining, according to MCS Property’s Julius Colman.

The Australian Exempt Property Market will shortly announce new managers joining, according to MCS Property’s Julius Colman.

Colman told Money Management that the market, which is operated by Austock on behalf of MCS, had received interest from several other property groups who are to join the market, though he would not comment on which groups had applied for a seat at this stage.

The secondary market was established last year by MCS Property for investors to buy and sell its securitised direct property vehicles (or property syndicates). This was done partly in response to investor concerns about the liquidity of these prod-ucts.

Colman was addressing delegates at the FPA Convention where he called on finan-cial planners to take a second look at securitised direct property investment. He said these investments offered investors greater diversity. “The most wonderful quality direct property has is it is able to gain safety by diversity. It is the only major asset class to do this.

“It offers the increased safety of having assets that move in different ways at dif-ferent times.”

Securitised direct property investment was not dependent on the movements of the stock markets, Colman said, as opposed to listed property trusts which fluctuated in sync with the Australian Stock Exchange. “Do listed property trusts give you prop-erty? No — they behave in an opposite direction to property.”

And direct property, he said, had “proved itself a hedge against inflation”.

Colman said this market was in a rapid growth phase, with $3.5 billion under man-agement at last count. The popularity of property also related to investors’ famili-arity with this form of investment, the relative ease of borrowing against it and the fact that it provided acceptable gearing to many Australians.