Confusion in the property market is fuelling adviser concern over emerging risks and pricing in the listed property trust sector and facilitating a desire to return to a more diversified approach to the property sector.
APN Funds Management retail director Mike Doble said the relatively recent internationalisation of the property sector had created real challenges for financial planners in terms of allocating property investments.
“Property is the last sector to truly globalise and with that has come a lot of confusion. We see financial planners who see the risks and difficulties in picking the different [property] markets,” Doble said.
He said a resounding response at APN’s recent roadshow from more than 500 financial planners was their desire to invest with professional fund managers who offered a diversified property offering across all sectors of the property market, including listed, unlisted and direct property securities in domestic and international markets.
However, to combat the declining property yields compared to five to 10 years ago, financial planners and investors need to target fund managers with a focus on higher income returns. This strategy could mean possibly forgoing some capital growth to create a consistent and sustainable income level for investors.
“Retirees or other income-dependent investors cannot afford wild variations in performance. Property is unique in its potential to provide high stable income over a long period of time,” Doble said.
APN Funds Management is an active international fund manager focusing on value investing. As at December 2006, it had over $4.5 billion in funds under management invested across 13 property funds.
