07-06-2014, 02:08 PM
They totally forgotten about AVJ especially when Sing high-end properties have literally stalled and Simon is likely to be a keen seller...
Property stocks with potential
Larry Schlesinger
541 words
7 Jun 2014
The Australian Financial Review
AFNR
English
Copyright 2014. Fairfax Media Management Pty Limited.
On the radar Smart investors will be looking for the next Australand, writes Larry Schlesinger.
Stockland may have lost out in its bid for smaller rival Australand after a higher bid from Singapore-listed Frasers Centrepoint, but there will still be a consolation prize – and a lesson for retail investors.
Australia's biggest diversified property group stands to make an $85 million profit from its holding in Australand.
Stockland acquired its 19.9 per cent stake in Australand in March at $3.78 per security. Frasers' all-cash offer values Australand at $4.48 per security. Not a bad return for a few months' work.
Smart investors will be looking for the next Australand or Commonwealth Property Office Fund, the office trust acquired by DEXUS in partnership with the Canada Pension Plan Investment Board in January.
Further opportunities are expected.
In a recent research note, DEXUS said it anticipated "an increase in corporate -mergers and acquisitions to enable major players to expand their asset base and gain efficiencies".
The $3 billion Investa Office Fund (IOF) is tipped by analysts as a possible takeover target.
The Morgan Stanley-backed fund (with 22 Australian office properties weighted heavily to Sydney, Melbourne and Brisbane) is said to be a possible takeover target for GPT, but could also be a platform for a potential backdoor listing for the wider, privately held Investa portfolio. The portfolio is 96 per cent leased and has a weighted average lease expiry of five years.
Analysts also consider the $1.4 billion BWP Trust (which owns a portfolio of Bunnings warehouses, among the best performing retail assets) as a possible takeover target. Another is the $1.6 billion Charter Hall Retail REIT, which invests in supermarkets and shopping centres. Billionaire shopping centre owner John Gandel owns 5.8 per cent of Charter Hall Retail REIT and has been increasing his exposure to the listed retail property sector.
Small cap REITs, such as pub and bottle shop landlord HPI, office syndicator GDI Property and APN Property Group's Industria REIT were all on takeover radars after poor debuts last year – although they have since recovered ground.
"If they were to trade at a discount to their net tangible asset for some time, they could be targets," says Andrew Smith, a fund manager at Freehold Investment Management.
Outside of the property trusts, Brisbane-based developer Devine has firmed up as a takeover target after raising its full year earnings guidance. Leighton Holdings is Devine's majority shareholder, but is looking to exit this non-core investment as it focuses on infrastructure, mining and civil engineering work.
Some of the smaller listed residential developers may come into play as bigger rivals look to grow their work books and demand for new housing rises. "There could be synergy and scale benefits," says Ken Atchison, who heads up advisory firm Atchison consultants.
As a general rule, investors should keep an eye out for stocks trading at a discount to their net tangible asset backing. "This could indicate that current management is less than ideal," says Atchison.
Price-to-earnings ratios are also important. A high P/E could indicate expectations of higher earnings growth in the future.
Fairfax Media Management Pty Limited
Document AFNR000020140606ea670000n
Property stocks with potential
Larry Schlesinger
541 words
7 Jun 2014
The Australian Financial Review
AFNR
English
Copyright 2014. Fairfax Media Management Pty Limited.
On the radar Smart investors will be looking for the next Australand, writes Larry Schlesinger.
Stockland may have lost out in its bid for smaller rival Australand after a higher bid from Singapore-listed Frasers Centrepoint, but there will still be a consolation prize – and a lesson for retail investors.
Australia's biggest diversified property group stands to make an $85 million profit from its holding in Australand.
Stockland acquired its 19.9 per cent stake in Australand in March at $3.78 per security. Frasers' all-cash offer values Australand at $4.48 per security. Not a bad return for a few months' work.
Smart investors will be looking for the next Australand or Commonwealth Property Office Fund, the office trust acquired by DEXUS in partnership with the Canada Pension Plan Investment Board in January.
Further opportunities are expected.
In a recent research note, DEXUS said it anticipated "an increase in corporate -mergers and acquisitions to enable major players to expand their asset base and gain efficiencies".
The $3 billion Investa Office Fund (IOF) is tipped by analysts as a possible takeover target.
The Morgan Stanley-backed fund (with 22 Australian office properties weighted heavily to Sydney, Melbourne and Brisbane) is said to be a possible takeover target for GPT, but could also be a platform for a potential backdoor listing for the wider, privately held Investa portfolio. The portfolio is 96 per cent leased and has a weighted average lease expiry of five years.
Analysts also consider the $1.4 billion BWP Trust (which owns a portfolio of Bunnings warehouses, among the best performing retail assets) as a possible takeover target. Another is the $1.6 billion Charter Hall Retail REIT, which invests in supermarkets and shopping centres. Billionaire shopping centre owner John Gandel owns 5.8 per cent of Charter Hall Retail REIT and has been increasing his exposure to the listed retail property sector.
Small cap REITs, such as pub and bottle shop landlord HPI, office syndicator GDI Property and APN Property Group's Industria REIT were all on takeover radars after poor debuts last year – although they have since recovered ground.
"If they were to trade at a discount to their net tangible asset for some time, they could be targets," says Andrew Smith, a fund manager at Freehold Investment Management.
Outside of the property trusts, Brisbane-based developer Devine has firmed up as a takeover target after raising its full year earnings guidance. Leighton Holdings is Devine's majority shareholder, but is looking to exit this non-core investment as it focuses on infrastructure, mining and civil engineering work.
Some of the smaller listed residential developers may come into play as bigger rivals look to grow their work books and demand for new housing rises. "There could be synergy and scale benefits," says Ken Atchison, who heads up advisory firm Atchison consultants.
As a general rule, investors should keep an eye out for stocks trading at a discount to their net tangible asset backing. "This could indicate that current management is less than ideal," says Atchison.
Price-to-earnings ratios are also important. A high P/E could indicate expectations of higher earnings growth in the future.
Fairfax Media Management Pty Limited
Document AFNR000020140606ea670000n