Listed property 'a defensive buy'

Listed property sector stocks are bargains and will remain good buying even if real estate vacancies increase and dividends are chopped back.

So say Craig Tyson, ING (NZ) investment manger, and Craig Brown, senior investment analyst at ING (NZ), who said returns from the sector were well above bank rates and property was a defensive investment.

Even if vacancies rose from the current average 2.4 per cent in the listed sector to 10 per cent, yields would still be extremely attractive, they said.

Tyson has studied the analysts' forecasts of eight listed property trust and companies and found them all trading at discounts to net tangible assets and yields ranging from 6.7 per cent at Property For industry to 16.2 per cent for Kermadec Property Fund.

The sector's average yield was 10.5 per cent, he said. Payouts for this financial year are also picked to stay high and Tyson wondered if investors in single-asset syndicates or residential real estate would get good such good returns.

To read the full NZ Herald article click here

Posted: 18 Feb 2009

News articles