The AUI Property Outlook April 2012 identifies the office and healthcare property sectors as being particularly attractive, but even within these sectors there are some regions weaker than others.
Mr Mark Pratt, head of property, mortgages & capital markets at Australian Unity Investments (AUI), warns that while investors are again looking at property, they need to take into account that different sectors and locations are performing very differently.
“Investors have recently started to turn to property markets as a way of achieving a mix of income and capital growth in their investment portfolios.
“Property’s defensive characteristics such as an income focus, the potential for capital gain, as well as lower levels of volatility are attractive compared with other assets currently.
“However, investors need to recognise that the property sector is made up of different types and locations which must be taken into account.
“Even within sectors, property does not perform consistently throughout Australia and location plays a role.
“AUI believes the outlook for office properties in Melbourne, Brisbane and Perth make them a good investment but in Canberra the office property market is in decline due to an oversupply of office buildings and as the government increasingly looks to cut costs and down-size,” Mr Pratt said.
Mr Martin Hession, head of AUI’s property funds, agrees that the office sector is an excellent example of the variations in valuations and returns in different geographic regions.
“In addition, sectors within the traditional property sectors, such as healthcare or retirement villages, are an appealing option for investors.
“We like healthcare in particular because of the anticipated increased demand from ageing baby boomers needing more medical support.
“The predicted ageing of Australia over the next 20 years makes private hospitals, medical centres and nursing homes attractive propositions, with long and secure tenancies and good rental returns,” Mr Hession said.
Australian Unity Investments is the funds management arm of financial services, health and retirement living services provider Australian Unity. It has over $11.7 billion in funds under management (as at 29 February 2012).
The property funds management business has over $1.7 billion in funds under management (as at 29 February 2012). Its unlisted property funds and syndicates own more than 60 properties in the healthcare, retail and commercial sectors, in Victoria, New South Wales, Queensland, Australian Capital Territory, Western Australia and South Australia.
For more information please contact:
Mark Pratt – Phone: 03 8682 4448
Martin Hession – Phone: 03 8682 4408
3 April 2012