Property & Infrastructure Funds Unlisted Property Trusts

Discussion in 'Shares & Funds' started by The Falcon, 9th Jun, 2018.

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  1. The Falcon

    The Falcon Well-Known Member

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    Keen to get any suggestions on locating managers of unlisted property trusts that are asset specific, tending to more conservative gearing and without an egregious fee structure.

    Long term lock up no problem, company investor. Intending to add some unlisted stuff to the portfolio and at the size of investment I am looking at the market is distorted by SMSF investors so direct investment not particularly attractive.

    @Player @Scott No Mates @The Y-man @bookworm and others any names appreciated and I will work through them.
     
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  2. The Y-man

    The Y-man Moderator Staff Member

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    I wouldn't put myself in the league of the other names up there :p but thanks for the shout out :)
    My unlisted are with pretty straight forward "retail off-the-shelf" with Charter Hall and Cromwell, and only because "I liked the building". Centuria has been bandying a few about (80 Grenfell being the latest) but haven't looked too closely at it (although I have their listed CIP).

    The Y-man
     
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  3. Nodrog

    Nodrog Well-Known Member

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  4. Nodrog

    Nodrog Well-Known Member

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    This from Whittaker:

    “A good example is the Sentinel Property Trust in Brisbane, in which my own SMSF is invested. Their track record is brilliant but they are too small to ever be considered by any of the big institutions.”
     
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  5. The Falcon

    The Falcon Well-Known Member

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    Cheers mate, I beleive Michael Sherlock (founder brumbies bakehouse) has a large sum invested with Sentinel. I’ve looked at them but my spidey senses suggest a whiff of white shoe and some fairly aggressive leverage....I’ve
    seen mention of performance fees being a bit rough as well...but going to look more closely.
     
  6. Redwing

    Redwing Well-Known Member

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    Watching with interest as dont know much about unlisted property trusts

    Unlisted property funds beat the market in 2017

    Unlisted property funds were one of the best performing asset classes in the country in 2017, with total returns three times stronger than Australian equities.

    The unlisted property funds averaged total returns of 23.4 per cent for the calendar year, according to a Zenith Investment Partners, MSCI and the Property Funds Association report.

    That return compares to the 7.7 per cent return delivered by Australian equities.

    Maarten Broek, executive director at MSCI, said unlisted property funds also outperformed most other asset classes on a risk-adjusted basis.

    Also..

    Property Funds Association

    Property Funds Association of Australia (formerly ADPIA - Australian Direct Property Investment Association)
     
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  7. Player

    Player Well-Known Member

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    They are aggressive and it is obvious from their IM's which I've ceased receiving. Also they aren't always a one asset per trust type vehicle. More's the pity as winning acquisitions can sometimes be lumped in with dogs to even out the IRR's. When I undertake due diligence on one asset I expect that is all I will be investing in. I prefer a la carte.

    Be wary right now as caps are compressing and we are (probably) near the top of the cycle with interest rates where they are..................not advice; just opinion


    Albeit a few years old this thread may help also:

    Sentinel Property Group and Sentinel Retail Trust

    I will PM you @The Falcon
     
    Last edited: 13th Jun, 2018
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  8. Paul@PFI

    [email protected] Tax Accounting + SMSF Business Plus Member

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  9. Scott No Mates

    Scott No Mates Well-Known Member

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    That is one of the big risks with unlisted trusts - a run on cash (redemptions) on an illiquid asset means having to wait for the asset to be sold or for new investors entering the market before you can get cash out.
     
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  10. The Y-man

    The Y-man Moderator Staff Member

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    ...which at the end of the day (assuming no hanky panky going on behind the scenes) would be similar risk as going JV on a property (commercial or resi) as many (often first-time) posters seem keen to do?

    The Y-man
     
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  11. Scott No Mates

    Scott No Mates Well-Known Member

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    Not quite the same risks @The Y-man

    An unlisted PT will require a PDS (if it is meets ASIC requirements for the number of investors).

    JVs usually only have a few partners and don't require a PDS (investors may be considered 'sophisticated' (or more aware of the risks). A each participant in a JV has more control than within an unlisted PT. Exiting either are difficult however they both may be onsold to existing investors/JV Partners or a new investor found.
     
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  12. The Falcon

    The Falcon Well-Known Member

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    Spot on, and there should be an illiquidity premium over A-REITs for this reason.....you need to expect long term lock up on and investment like this and understand the risks involved. I would not invest in a fund that allows regular redemptions.
     
    Last edited: 13th Jun, 2018
  13. Scott No Mates

    Scott No Mates Well-Known Member

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    The alternative would be to get into a syndicate - fixed term and usually only a single asset. Still has the difficulty of exiting the investment but may be sold sooner than the full term.
     
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  14. Nodrog

    Nodrog Well-Known Member

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    Yep, experienced this first hand during the 87 Crash. A couple of our unlisted property trusts froze redemptions for quite a period. Perhaps there’s an illiquidity premium but like property in general I think there’s just too many hassles involved. But that’s just me.
     
  15. The Falcon

    The Falcon Well-Known Member

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    But surely if one invests in an illiquid asset like property that they cannot expect to just redeem at will and get the cash without getting a major haircut ? I frankly wouldn’t invest in any vehicle that allowed an investor to do so - where does the cash come from? In most cases investors are protected from redemptions at the worst time (lowest valuation). In my view, You need to commit to the term, be it 5-7 years, and if it has to roll on because of market conditions so be it.

    If not and you want indirect prop holdings and you need liquidity you can sell A-REITs at the bottom of the market any trading day. I don’t see illiquidity as an issue in itself.
     
  16. Paul@PFI

    [email protected] Tax Accounting + SMSF Business Plus Member

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    But....thats the key difference between a listed and an unlisted property trust. A listed trust tgat isnt suspended from trading is capable of unit transfer on demand.
     
  17. qak

    qak Well-Known Member

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    Blue Sky :rolleyes:
     
  18. The Falcon

    The Falcon Well-Known Member

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    Yep, thats what I said ;

    If not and you want indirect prop holdings and you need liquidity you can sell A-REITs at the bottom of the market any trading day.
     
  19. The Y-man

    The Y-man Moderator Staff Member

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    Confusion may be creeping into the conversation as an A-REIT can be listed or unlisted.
    "unlisted (Aussie) property trust" = "unlisted A-REIT"
    If it's traded on an exchange, then it is a "listed A-REIT"
    if I understand correctly that is..... :p

    The Y-man
     
  20. The Falcon

    The Falcon Well-Known Member

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    Good point, for clarity A-REIT = ASX traded security vs unlisted trust.