High quality listed real estate
Quality is key in seeking to deliver sustainable long-term returns
Bottom-up process
Investing in a range of property sectors and securities primarily in Australia
Specialist team
Local specialists identify trends and opportunities
We believe that:
- successful real estate investment requires an integrated, rigorous and disciplined investment approach;
- local expertise is key in understanding local trends and changing market conditions.
- in the long term, real estate securities supported by a sustainable business model and quality assets, run by experienced and capable management, should outperform;
- in the short term, a flexible approach to valuation is needed to take advantage of mis-pricings between, sectors and stocks;
- risk is prevalent across a range of variables and needs to be carefully assessed at each point in the process.
Daily liquidity
Over the medium to long term, listed real estate is driven by the same bricks and mortar economic fundamentals as the unlisted real estate market, but it is generally accessible daily.
Exposure to global mega trends
Australian listed real estate is a beneficiary of global and domestic demographic and secular trends such as ecommerce, digitalisation and ageing populations.
Inflation hedge
Earnings and dividends may be underwritten by contractual leases that are protected against inflation via annual increases to some of the strongest tenants in the world (governments and investment grade corporates). This helps provide the asset class with security of cash flow, earnings and reliable income.
Greater diversification
Real estate securities have the potential to be diversifiers in balanced portfolios and may help to lower risk as part of a diversified portfolio.
Our investment process consists of a fundamental, bottom-up, valuation-based stock selection methodology complemented by secondary top-down considerations.
A comprehensive and detailed research driven approach is a key element of our investment process. Our integrated approach applies a rigorous focus on bottom-up company fundamentals. Analysts with primary coverage of a company are further complemented by team members with secondary coverage of the same company which encourages peer review and debate. Bottom-up fundamental research is central in producing the measures used to identify and rank securities suitable for investment.
For more information on our equity capabilities
Risks
All investments carry risk. Different investments carry different levels of risk, depending on the investment strategy and the underlying investments. Generally, the higher the potential return of an investment, the greater the risk (including the potential for loss and portfolio value variability over the short term). Some of the significant risks of the Strategy are included below.
Investment risk: The Strategy has exposure to share markets. The risk of an investment in the Strategy is higher than an investment in a typical bank account or fixed income investment. Amounts distributed to unitholders may fluctuate, as may the Strategy’s unit price, by material amounts over short periods.
Market risk: The investments that the Strategy has exposure to are likely to have a broad correlation with share markets in general. Share markets can be volatile and have the potential to fall by large amounts over short periods of time. Poor performance or losses in domestic and/or global share markets are likely to negatively impact the overall performance of the Strategy.
Property sector risk: The Strategy has exposure to a concentrated group of securities related to the property sector, which are likely to be highly correlated. The relatively small number of securities in the Australian property sector means that the Strategy’s returns may also be materially affected by the performance of a single security. The property sector generally has the potential for high levels of volatility and is sensitive to a number of factors, including market sentiment regarding property valuations, availability and cost of finance, default rates of borrowers, rental demand, and the general economic outlook. Adverse events affecting the property sector will impact the performance and returns of this Strategy.
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