How to select a good Listed Property Trust???

[JIT]

Hi,

How do you select a good Listed Property Trust? I've had a look at a few PDS of some LPT's. I feel the biggest downside of this sort of managed investment (like many others) is your complete lack of control on the future performance of the LPT.

You really have no say in future asset selection or asset allocation, or the future strategic directions of the fund. The fund you bought into at the start, could completely change in nature in a few years time.

Everything is left to the whim of the fund manager.

I would guess then that the main thing is trying to pick a good fund manager. But, again, how do you do this???? Maybe see who is this years 'Fund Manager of the Year'? - but then also consider that 'past performance is no guarantee of future performance'...?

It all seems such a random and speculative process to me, especially compared to selecting an investment property?

Does anyone have a system?

Any thoughts?

GSJ

[FrankGrimes]

GSJ

My selection has been based on

- Low MER
- Good performance history over the long term ie 5 years + (use tradingroom.com.au)
- Reputation

There are plenty of funds which fit this criteria. However, you are right in saying that you have no control over their assets, but thats life. Most of the funds have alot of diversification.

Most fund managers have an 'objective' and they will change their holdings accordingly. You need to make sure the fund matches what YOU want to acheive.

Ie..

High income
Low volatility
High CG

List goes on...

[The Y-man]

If you are looking at particulart property trusts (as opposed to Property Funds), then the disclosure statements should give you an indication of some key pointers:

1. type of property - industrial (heavy/light), office, retail, etc
2. land banking
3. tenant selection criteria (eg. listed orgs, government depts)
4. lease types / lengths
5. current rental returns

For example, if the majority of tenants are government dept's with 15 year leases, in buildings specifically designed for them - now that's a good thing :)

Cheers,

The Y-man

[JIT]

Thanks for the replies.

A very interesting topic.

Have read a few more PDS, and am trying to get some sort of criteria/system happening.

GSJ

[Dazzling]

Does anyone have a system?


Hi GSJ...we've chatted before about this subject and you just know what I'm going to say don't you.

If you are concerned about the lack of control of an LPT investment, then my suggestion is to jump into the driving seat and be your own fund manager....the pay is great !!!

Of course, most people will jump up and say "but you lose all of your diversification".....exactly, and it's great for building wealth by doing so. The lessons you learn negotiating sales contracts / leasing contracts and closing deals for 10 to 15 years is invaluable, and sets you up for bigger and better things later on.

As time passes and you grow in both confidence and equity, one gets to diversify into other properties - smearing out the risks. The best thing is you are 100% in control of the investment.....similar to all of the folk owning their own IP's.

I know it's a big step, and if your burning ambition is to own a shopping centre in the heart of Sydney....it may be a while....but having your name (or a trust) all over the title deed feels soooo much better than owning a few LPT's.

Like Noel Whittaker once said, "looks like a share, smells like a share and feels like a share.....it's a share".

[Jase H]

Are you talking about listed property trusts? or unlisted property funds?

I much prefer the former and the best of the best is Westfield Holdings due mainly to its wonderful owner/manager Frank Lowy, high Return on Equity and its US growth strategy. But it will rarely be considered cheap or out of favour on a valuiation basis.

Also Australand appears quite cheap on a dividend yield basis at the moment about 9% yield 57% franked. It has been out of favour due to leverage to NSW property market but the -VE sentiment appears to be over due. It also pays 1/4ly distrubutions.

My opinions only


Cheers

Jase H

[JIT]

...feels soooo much better than owning a few LPT's.

Like Noel Whittaker once said, "looks like a share, smells like a share and feels like a share.....it's a share".

Yes, LPT's have a positive correlation to the sharemarket and are thus subject to similar rises and falls or volatilities (maybe not as severe though). Their performance is essentially tied to the sharemarket and not solely the result of the underlying direct property asset holdings. This, along with the fact that I don't really understand the sharemarket, and yes...the lack of control...makes me uncomfortable with LPT's. At present, I am leaning more towards unlisted property trusts or property syndicates, that invest directly in commercial property, and not in other trusts or other funds, with some form of limited liquidity facility. Still, you don't have full control, but at least you know exactly where your money is going and what the fund manager is doing with it, and the investment performance is less volatile and more predictable. Going solo as Dazzling has, is the next step, but that could be a while...

GSJ

[meat_tray]

Of course, the 'loss of control' that you get with LPTs is also a good thing. It means it's a hands-off investment, leaving you free to do other things.

IMHO, you can waste a lot of time worrying about LPT selection (do I buy Westfield, Mirvac, Valad, or...). The 'expert' fund managers can even get it right, their performance is no better than the market average, so I've just bought a few (including Westfield and Australand, as recommended by JH) and am holding long-term.

I have the same opinion on monitoring their performance. Mirvac announced the other day a $250M joint venture on the Gold Coast. It's a 10 year project. Nobody can forecast the performance of something like that, and what it should mean for the share price. So, I just ignored it.

This might all sound a bit pessimistic, but the long-term performance of LPTs has been very strong, and I think it's pretty safe to just buy a diversified selection and hold through thick and thin.

It's not an LPT, but I've also bought some AV Jennings recently. They have a big exposure to the NSW property market, so it might be a bit rocky over the short/medium-term, but that's already factored into the share price, and I think it has very good prospects over the longer term. The 6.8% fully-franked (ie almost 10% gross) dividend also helps. Does anyone know if they make good houses?
Cheers,
MT

[meat_tray]

Oops, I meant to say, "The expert fund managers CAN'T even get it right.

[Jase H]

I agree with meat tray re. his assessment of the sharemarket. Don't get too worried by short term price fluctuation re. buying LPT's or any other listed shares for that matter.

Remember a quote by the original value investor himself Benjamin Graham

"In the short term the stock market is a voting machine but in the long term the stock market is a weighing machine"

In other words short term price movement is caused by how popular a stock/LPT is, but long term price movement is caused by how much a company/LPT increases its Earnings Per Share.

Use the short/mid term price volatility to help you purchase when undervalued and sell when overvalued.

Another great quote to remember is

"Price is what you pay and value is what you get"


Cheers

Jase H

[Jase H]

GSJ,

Another thought just occured to me re. your issue in trying to pick a good Listed Property Trust. Vanguard Investments have a Listed Property Trust which is an index tracker of all LPTs within either the ASX 200 or ASX 300, I can't exactly recall, but it basically tracks the average return of all the LPTs on the ASX.

This gets rid of Company specific risk (due to diversification) but obviously still has overall market risk. Another advantage of using this type of fund is its low fees MER or 0.9% from memory, compared to average of around 2%. ALso no entry or exit fees just a buy/sell spread to cover their transaction costs.

Most Margin Lenders will allow an LVR of 70% with these type of invretments and an extra margin call buffer of another 10%.

FYI and for full disclosure I currently hold about 20k in the above mentioned Vanguard Property Securities Fund. It has done very well for my since starting it around Feb '06 and pay distrubutions 1/2 yearly.


Cheers


Jase H

[Simon]

Hi,

How do you select a good Listed Property Trust? I've had a look at a few PDS of some LPT's. I feel the biggest downside of this sort of managed investment (like many others) is your complete lack of control on the future performance of the LPT.

You really have no say in future asset selection or asset allocation, or the future strategic directions of the fund. The fund you bought into at the start, could completely change in nature in a few years time.

Everything is left to the whim of the fund manager.

I would guess then that the main thing is trying to pick a good fund manager. But, again, how do you do this???? Maybe see who is this years 'Fund Manager of the Year'? - but then also consider that 'past performance is no guarantee of future performance'...?

It all seems such a random and speculative process to me, especially compared to selecting an investment property?

Does anyone have a system?

Any thoughts?

GSJ

You make it sound like the fund managers are a bunch of dart armed monkeys.

If you have the time, inclination and skills to run it yourself then go for it.

if you are deficent in any are then consider using an expert fund manager to help you reach your goals.

Of course we are all experts after this last boom - the proof of the pudding lies in the next few years I suspect!

Cheers,

[JIT]

You make it sound like the fund managers are a bunch of dart armed monkeys.

If you have the time, inclination and skills to run it yourself then go for it.

if you are deficent in any are then consider using an expert fund manager to help you reach your goals.

Of course we are all experts after this last boom - the proof of the pudding lies in the next few years I suspect!

Cheers,

Ummm....no, my point is that most small retail investors are a 'bunch of dart armed monkeys' trying to pick a good LPT/good fund manager to entrust their hard earned savings and make them some money.

I think I posed a valid question. If you don't have any criteria or system to pick one that, firstly, suits you, and secondly, has a chance of doing well, then you may as well go to the TAB, pokies, or casino and try your luck there.

What's your approach Simon?

GSJ

[Trogdor]

Ummm....no, my point is that most small retail investors are a 'bunch of dart armed monkeys' trying to pick a good LPT/good fund manager to entrust their hard earned savings and make them some money.

I think I posed a valid question. If you don't have any criteria or system to pick one that, firstly, suits you, and secondly, has a chance of doing well, then you may as well go to the TAB, pokies, or casino and try your luck there.

What's your approach Simon?

GSJ

If one sticks with a few wholesale LPT funds, with low MER, and a track record of at least matching the XPJ index (not hard to do) then you would get the benefits of the LPT asset class quite easily.

As an aside I think this sector is starting to look quite expensive and much harder to justify new investment into.

I've been very happy with performance recently, though.

[JIT]

Thanks for the comments,

Jase H, meat_tray, Trogdor - for me picking a good LPT/good fund manager still seems akin to gambling. In a booming market it may not be so hard, but if the investing climate changes I think it will be much more difficult. Many LPT's appear to have done well in the last 5 years, but the next 5 years may not be so good.

You have all mentioned or alluded to the use of index funds, and I think Frank also mentioned this in another thread - I agree, I think investing this way makes a lot more sense then taking a punt on a specific LPT. This is certainly something I would consider. Lower fees, and perhaps more stability and more predictability, as well as diversification - and all the benefits of the LPT asset class, as Trogdor said, excluding market specific risk.

Furthermore, if I had a lot of money to invest, say 1, 2 or 3 million, rather than 20k-200k, for example, and were to put this money into LPT's to generate a reliable and secure inflation-hedged income stream, I would want to have some pretty convincing reasons or criteria/system to put this hard earned money/equity into a specific LPT. If not, I would index or consider other alternatives.

I would not simply trust an 'expert fund manager' with all this money, that I may have generated/created through years and years of investing in residential property, for instance.

Any thoughts?

GSJ

[Trogdor]

Thanks for the comments,

Jase H, meat_tray, Trogdor - for me picking a good LPT/good fund manager still seems akin to gambling. In a booming market it may not be so hard, but if the investing climate changes I think it will be much more difficult. Many LPT's appear to have done well in the last 5 years, but the next 5 years may not be so good.

You have all mentioned or alluded to the use of index funds, and I think Frank also mentioned this in another thread - I agree, I think investing this way makes a lot more sense then taking a punt on a specific LPT. This is certainly something I would consider. Lower fees, and perhaps more stability and more predictability, as well as diversification - and all the benefits of the LPT asset class, as Trogdor said, excluding market specific risk.

Furthermore, if I had a lot of money to invest, say 1, 2 or 3 million, rather than 20k-200k, for example, and were to put this money into LPT's to generate a reliable and secure inflation-hedged income stream, I would want to have some pretty convincing reasons or criteria/system to put this hard earned money/equity into a specific LPT. If not, I would index or consider other alternatives.

I would not simply trust an 'expert fund manager' with all this money, that I may have generated/created through years and years of investing in residential property, for instance.

Any thoughts?

GSJ


Your logic makes sense.

However, one point I could add as to why an index fund may not be a good choice in all circumstances for the LPT sector, especially if you seek a high yield "reliable and secure inflation-hedged income stream", is that Westfield (and other names with high levels of non-rent earnings) make up a big chunk of the XPJ index.

By using a fund manager (wholesale, low MER, etc) you may be able to be better exposed to the LPT sector as it traditionally existed (say 5+ years ago) before the rounds of mergers, consolidations, and growth of corporate style and overseas earnings.

For an example of this style of fund look at APN Funds management (ie Property for Income fund #1 and #2) which specifically advertise this point - but many others are significantly underweight with Westfield and the like.

[The Y-man]

If you see a great commercial property that you would love to own, find out if it is owned by a trust, and see if they are open to retail investors :)

Cheers,

The Y-man

[JIT]

Your logic makes sense.
However, one point I could add as to why an index fund may not be a good choice in all circumstances for the LPT sector, especially if you seek a high yield "reliable and secure inflation-hedged income stream", is that Westfield (and other names with high levels of non-rent earnings) make up a big chunk of the XPJ index.

By using a fund manager (wholesale, low MER, etc) you may be able to be better exposed to the LPT sector as it traditionally existed (say 5+ years ago) before the rounds of mergers, consolidations, and growth of corporate style and overseas earnings.

For an example of this style of fund look at APN Funds management (ie Property for Income fund #1 and #2) which specifically advertise this point - but many others are significantly underweight with Westfield and the like.

Trogdor,

Yes, I was just reading about this in an article called 'the relevance of the index'. Apparently in 2003 and 2004 there were a lot of mergers and consolidations amongst exisiting LPT's - there used to be smaller sized and more sector specific trusts, but now there are more bigger sized and diversified trusts.
In addition many on the LPT's are becoming 'stapled securities', meaning they are associated with a listed company, and hence part of their earnings comes from business income and has the associated risk/volatility of business, like Westfield, as you have mentioned. This aspect of LPT's is again unnattractive to me as I don't understand business much, or the various creative (non-rental) ways these LPT's are now using to generate income.

I really don't like to invest in anything I don't fully understand.

These bigger LPT's are, as you suggest, unlike what they may have been in the past - perhaps a lot simpler, straightforward, easier to understand, and basically predominantly making their money from the income/capital growth of direct property investments.

Due to their sheer size, these LPT's are essentially changing the nature of this LPT index. There is more and more of a 'sharemarket effect' on the LPT index. The reliability, security, risk and volatility profiles of LPT's may be very different in coming years.

Thanks for the tip - I will have a look at the PDS of APN Funds Management, and some of the index funds currently available...

GSJ

[JIT]

I had a look at the LPT index funds, there aren't many variations amongst them, they just track the big LPT's, no sector specific index funds etc...

Also looked at APN Funds, which is good in that it avoids LPT's that make substantial returns from business/development related income and has some investments in unlisted property trusts, thus reducing risk/volatility.

These types of LPT funds, or property securities funds, I think are good. They offer high income, moderate CG, lower risk/volatility, and high liquidity. Again, however, the dilemma of selection exists! - as there are many of these funds around. But I feel a lot clearer about my potential investing options now.

I will try and find a simple way to narrow these selections down.

GSJ

[kissfan]

Again, however, the dilemma of selection exists! - as there are many of these funds around. But I feel a lot clearer about my potential investing options now.

I will try and find a simple way to narrow these selections down.
Hi GSJ.

Please keep us informed of your quest, it's informative reading.

Regards
Marty

[JIT]

No problems Marty.

GSJ

[Trogdor]

Trogdor,

Yes, I was just reading about this in an article called 'the relevance of the index'. Apparently in 2003 and 2004 there were a lot of mergers and consolidations amongst exisiting LPT's - there used to be smaller sized and more sector specific trusts, but now there are more bigger sized and diversified trusts.
In addition many on the LPT's are becoming 'stapled securities', meaning they are associated with a listed company, and hence part of their earnings comes from business income and has the associated risk/volatility of business, like Westfield, as you have mentioned. This aspect of LPT's is again unnattractive to me as I don't understand business much, or the various creative (non-rental) ways these LPT's are now using to generate income.

I really don't like to invest in anything I don't fully understand.

These bigger LPT's are, as you suggest, unlike what they may have been in the past - perhaps a lot simpler, straightforward, easier to understand, and basically predominantly making their money from the income/capital growth of direct property investments.

Due to their sheer size, these LPT's are essentially changing the nature of this LPT index. There is more and more of a 'sharemarket effect' on the LPT index. The reliability, security, risk and volatility profiles of LPT's may be very different in coming years.

Thanks for the tip - I will have a look at the PDS of APN Funds Management, and some of the index funds currently available...

GSJ

Good summary. The other thing you prob should research would be:

(a) the level of rental income from overseas (many LPTs have US buildings and derive much of their rental from there);

(b) levels of borrowing as a ratio of assets; and

(c) hedging levels for both $AUD/$USD (important if holding lots of property o/s and also hedging levels for interest rates.

Keep in mind that a lot of the funds that hold US would be borrowing at a low US interest rate, and getting high yields, so would be returning high levels of distributions, which could be affected by currency changes and also interest rate rises - which is why long term appropriate hedging would be needed.

As a whole, though, I think its a great sector (expensive over the last month or two - with a sudden approx 15% rise - but should revert back at some stage to lower levels in my (very) humble opinion.

Now the above obviously applies to individual LPTs. In terms of managed funds - I also would look at UBS Property Securities Fund (I hold this one). MER of 0.8% from memory, a great track record (imho). I will keep on adding new funds to this at appropriate times (ie. when not too expensive).

I would be interested in hearing what you find in terms of your research - pls PM me or post on here if thats ok!

Sorry it took me a while to post - been tied up.

[JIT]

Trogdor,

Good points re. overseas income, gearing, hedging.

I will check out the UBS fund.

Will post further findings in due course.

GSJ

[JIT]

Ah, this must be a good thread to get its own sub-forum!

GSJ

[geoffw]

Congratulations for starting the first thread in a new forum.

Other threads will follow, as we redirect other postings.

[JIT]

Congratulations for starting the first thread in a new forum.

Other threads will follow, as we redirect other postings.

Thanks, this will be a great resource for commercial property investing. Look forward to reading some new posts in this forum.

GSJ

[landlubber]

Sorry for being a "johhny come lately" to this discussion .. but it's a topic I'm interested in since I have some money in my SMSF ..but not enough for a decent resi IP !!

Why wouldn't you just look at (a) the one year performance (b) the five year p. and then (c) the Morningstar rating ... Isn't THAT what the Morningstar boys do ...sort the "good ones" (five star) from the "less than good"ones.

Happy to be educated on this one :) ... thanks.

LL

[JIT]

As they say, 'past performance is no guarantee of future performance'.

Yes, you could use Morningstar ratings as the basis of a selection system, that will certainly narrow your options to some degree and keep things simpler.

There would still be a bit of 'guesswork' involved to further cut down your choices.

GSJ

[The Y-man]

Aren't morningstar ratings on commercial property funds rather than Listed Property Trusts (the topic of this thread)? :confused:

Cheers,

the Y-man

[JIT]

You might be right Y-man, probably funds not individual LPT's - I don't use their ratings anyway so wouldn't know for sure!

GSJ

[JIT]

Actually, just read the intial posts in this thread again - I think I was referring to the difficulty in selecting funds of LPT's (with active managers, rather than indexers), and also individual LPT's too - so the title perhaps should be 'How to select a good LPT or LPT fund/fund manager?'

GSJ

[Trogdor]

After having invested various chunks in the UBS Property securities fund over the last 18 months or so - and being amazed at the return - I am now a bit annoyed.

LPTs have rallied so much that to add large chunks of money going forward to the sector seems silly.

I would assume the sector would be lucky to be yielding 5 - 6% now as an index?

What are all your views about the price of the LPT sector?

[MJK]

XPJ index up 72 pionts or nearly 3% over the last three days! UBS unit price will soar I suspect.

MJK:D

[Trogdor]

XPJ index up 72 pionts or nearly 3% over the last three days! UBS unit price will soar I suspect.

MJK:D

Has so far - will go further (1 day lag).

I hold :)

Although i'm doing very well on unit price growth - yield on this is getting very, very low!! :( Feel like the "opportunity" to buy (ie add to) a great investment is gone.

[JIT]

Just mentioning a book I read recently called 'Super Safe Investing in Syndicates and Listed Property Trusts' by Tim Hewat.

Tim describes the following criteria for selecting individual LPT's:

(1) Diversification - choose more than one LPT

(2) Big Caps - select amongst the ASX top 150 companies - of which there may be > 20 LPT's

(3) Low P/E's - aim for LPT's with P/E ratio's of 12 or less; if so it is attractively priced from the value investor's point of view

(4) Price to Net-Asset-Backing - aim less than $1, so if it is80 cents, this is like buying a dollar for 80 cents

(5) Good Dividends - aim 10% or better

(6) Continuous Payouts - he says Benjamin Graham would eliminate shares that missed a single dividend, but he would say aim for dividends paid every year for the last 5 years, without interruption.

(7) Stop Losses - for protection

Those more familiar with the sharemarket may understand this better than I do.

A list of 'Attention Grabbing LPT's' that he thinks are worth considering (book written in 2003) - the ASX codes are:

ADP, AIP, AOP, ART, BWP, CEP, CEP, DDF, DIT, DOT, GPT, GHG, TTF, IOF, IPG, JFG, MAP, MGI, MLE, MOF, MGR, SGP, THG, WFA, WFT.

Any thoughts/comments?

GSJ

[The Y-man]

A list of 'Attention Grabbing LPT's' that he thinks are worth considering (book written in 2003) - the ASX codes are:

ADP, AIP, AOP, ART, BWP, CEP, CEP, DDF, DIT, DOT, GPT, GHG, TTF, IOF, IPG, JFG, MAP, MGI, MLE, MOF, MGR, SGP, THG, WFA, WFT.

Any thoughts/comments?

GSJ

Many of these codes won't be there any more.... :D

Don't worry, they didn't go bust - many consolidated or changed identity...
eg. the Deutsche and Westfield ones.

Cheers,

The Y-man

[Trogdor]

Many of these codes won't be there any more.... :D

Don't worry, they didn't go bust - many consolidated or changed identity...
eg. the Deutsche and Westfield ones.

Cheers,

The Y-man

Similarly - you would struggle to find these in this day and age!


(4) Price to Net-Asset-Backing - aim less than $1, so if it is80 cents, this is like buying a dollar for 80 cents

(5) Good Dividends - aim 10% or better


Yield is down, down, down, and as unit price is up price to net asset backing is > 1 usually now.

[rossv]

hi,

have you looked at APZ?

regards

rossv

[JIT]

Hi,

Yes, the book was written in 2003, so meeting some of those criteria today may be difficult.

For me, selecting an individual LPT, still seems similar to picking stocks - and something that doesn't suit my investor profile - which is very conservative.

I think for the LPT sector to come close to the stellar returns of the last 10 years, in the next 10 years, would be difficult.

Also, picking funds of LPT's/property securities funds, still seems a bit like gambling to me.

I must say that at the moment, the index fund (and ETF - exchange traded fund) market, is very appealing to me. The arguments in favour of indexing vs active funds management is to me quite overwhelming, and it would take a very convincing argument to persuade me otherwise.

Index funds/ETF's - whether they invest in property, local or overseas equities, or other sectors - I feel should form a significant part of the average investor's fund portfolio, with perhaps a smaller proportion in active funds. The market for these funds appear to be much, much bigger in the US, and only just developing in Australia.

Just my opinion!

GSJ

[Jase H]

Check out RAT (Rubicon America Trust) listed on ASX.
Yields right around 10%at current price of $1.15. I think it is trading at a slight discount to NTA not sure exactly.

Importantly its earnings (for about the next 6 years) are completely hedged from US/Aust dollar currency risk.

Its major tenants include the US Govt on very long leases.

And its distributions are largely tax deferred.

Disclosure: I currently own 10,500 RAT.

my cents

Jase

[pete_w]

eh it doesn't seem to have been mentioned yet but http://www.pir.com.au/ have a monthly review of lpt's http://www.pir.com.au/?mp=product&sp=mon

i've been a subscriber for a few years now and for the most part their calls have been rather good.

[JIT]

Hi everyone,

Here's a link to an interesting article by John Welch on stapled LPT securities:

http://www.investors.asn.au/downloads/sigs/Prop/PropSig0410.htm#stap

And a link to the ASX page on listed managed investments:

http://www.asx.com.au/investor/lmi/index.htm

GSJ

[FrankGrimes]

GSJ

Have you made up your mind yet? What did you decide?
I sold out completely of LPTs in Feb to buy a block of land

[JIT]

Hi Frank,

I decided not to bother trying to pick any LPT, or LPT fund manager! Good luck to all those who do though.

I prefer index funds or exchange traded fund's, generally speaking - though not necessarily the Australian LPT index at present - given the changing nature of the index, and also that I don't think it will perform as well in the next 5 years. I think you made a good move cashing out recently.

The other thing I like is private or public syndicated commercial property investments, but more so when investing with a self-managed superannuation fund.

GSJ

[JIT]

Trogdor,

Yes, I was just reading about this in an article called 'the relevance of the index'. Apparently in 2003 and 2004 there were a lot of mergers and consolidations amongst exisiting LPT's - there used to be smaller sized and more sector specific trusts, but now there are more bigger sized and diversified trusts.

In addition many on the LPT's are becoming 'stapled securities', meaning they are associated with a listed company, and hence part of their earnings comes from business income and has the associated risk/volatility of business, like Westfield, as you have mentioned. This aspect of LPT's is again unnattractive to me as I don't understand business much, or the various creative (non-rental) ways these LPT's are now using to generate income.

I really don't like to invest in anything I don't fully understand.

These bigger LPT's are, as you suggest, unlike what they may have been in the past - perhaps a lot simpler, straightforward, easier to understand, and basically predominantly making their money from the income/capital growth of direct property investments.

Due to their sheer size, these LPT's are essentially changing the nature of this LPT index. There is more and more of a 'sharemarket effect' on the LPT index. The reliability, security, risk and volatility profiles of LPT's may be very different in coming years.

Thanks for the tip - I will have a look at the PDS of APN Funds Management, and some of the index funds currently available...

GSJ
BUMP!

I just thought I'd bump this thread and this post above, given the recent hammerring Centro took on the silly sharemarket...

Part of the reason I gave up on trying to pick LPT's/LPT funds...

[yo yo ma]

Here's an interesting post about LPT's
http://www.somersoft.com/forums/showpost.php?p=118613&postcount=228

[BoatBoy]

Well, in some ways I'm glad my builder took a bit of extra time finishing off my new house and that council dragged the chain because if it all went to plan I would have sold 3 months ago (as per plan) and possibly would have loaded up on something.

Not saying it would have been this , but you never know.

I think I have decided to take an offer (mind changes regularly) on my house.

A bit more than the number I originaly had as a sale price at start, but quite a bit less than the numbers others (more by the day) have theirs for sale for (that are'nt selling).

Lookers, let alone buyers, have been few and far between for the last couple of months as well, and who knows what the new year has in store. (Centro made my tummy more nervie)

Still, a pretty good earn for cutting a few cheques and better than a poke in the eye with a sharp stick. Gotta be happy with that.

Lets me get back to more important things like building boats and getting to the land of 0.50c beer.


MMMmmmmmm Beer.

Dave