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Global Real Estate Company

Global Real Estate Company. Listed on ASX, strong balance sheet, 75% of revenues from outside Australia. 2 Core global Businesses - Real Estate Investments and Real Estate Solutions. 500 investor clients, public-private, debt-equity products, core to opportunistic.

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Global Real Estate Company

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  1. Global Real Estate Company • Listed on ASX, strong balance sheet, 75% of revenues from outside Australia. • 2 Core global Businesses - Real Estate Investments and Real Estate Solutions. • 500 investor clients, public-private, debt-equity products, core to opportunistic. • Approx US$50Bn in assets under management, 30 year track record in REIT’s and RE Securities. • GPT, LLUSOT, LLRosen, Houllihan-Rovers, Australian RE Securities Fund.

  2. J-REIT Market Progress Snapshot: • 5 J-REIT’s since Sept 01, US$3.4Bn market cap, 12% of listed RE sector, 0.15% of TSE. • Mainly retail investors (35-65%), domestic institutions (25-40%), foreign (10-25%) • Office sector focus, A to C- grade, some retail. RE sector facing some issues. • Regulatory framework OK, 100% tax pass through, external management, MER’s 44 – 65Bpts. • Abundant “cheap” debt, typical LTV’s 35% - 45%. • 4.5% - 8.5% asset NOI yields, 6.6% - 9.9% FFO yields, 4.8 – 6.6% dividend yield forecasts. • High yield spreads to JGB (approx. double developed markets). • Post IPO performance –24% to +6.6% movements. • NAV performance –2% to +1%.

  3. J-REIT’s - Progress Scorecard • It’s easy to be critical, BUT … • Great result in a very short period!!! • Remember that approx. 4 years ago, Japan didn’t even have enabling SPC regulations. • Japan has significantly benefited from the past mistakes in US and Australia. • Potential sponsor conflicts have been managed reasonably well (considering the various issues). • Post IPO performance is an issue – but view in light of overall market. • High spreads reflect market immaturity - major investor groups “wait and see”. • Current public/private yield arbitrage constrains growth.

  4. J-REIT’s - Looking Forward • What we need to see … • 2 – 3 reporting cycles, prospectus forecasts delivered. • Quantified RE market concerns (2003 problem in Tokyo, regional growth concerns). • Work-through some of the IPO “mistakes”. • Analyst coverage, TOPIX inclusion, investor decision-making (equity or real estate?). • UP-REIT structure will help, margin lending to take-off. • Capital from major domestic institutions and conservative retail investors – will occur when they see a positive risk-return equation. • US and Australian comparisons - J-REIT market cap US$75-100Bn within 8-10 years - CMBS market size US$100Bn within 8-10 years.

  5. Real Estate Investments

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