Australian REIT Monthly

Submitted by Jim Thesiger on 2 May, 2008 - 18:49

Here is an update on the Australian REIT Monthly (April 2008) provided by Australian market analyst UBS

Australian REIT Monthly

Month in review - April 2008
April 2008: Slight relative underperformance but in the black:

The S&P/ASX 300 Prop Accum index was up 4.2% in Apr'08, underperforming the S&P/ASX 300 Accum index by 0.3%. LPT's have under performed the broader Australian market over a 3 mth (-1.7%), 6 mth (-10.8%), 1 yr (-17.7%), 5 yr (-7.8%) and 10 yr (-1.8%) period.

UBS Commercial leads the way:

Commercial (+4.6%) & Retail (+0.1%) outperformed the LPT index while the Leaders (-1.0%), Diversified (-0.9%), Industrial (-1.0%) underperformed the LPT index as did RE Managers & Developers again (-6.4%).

Trust Performance: Worst performers barely negative:

The top performers over the month were CNP (+51.7%; last mth -33.3%), CER (+41.2%), MDT (+36.5%), AEZ (+31.1%) & MCW (+18.4%). The worst performing trusts for the month were IIF (-1.9%), VPG (- 1.5%), BWP (+0.3%), GPT & WDC (both up c.2.5%).

Sector at a discount of 12.5% to DCF Fair Value and DPS Yield of 7.3%:

We recently put through a mild change to our key picks, reversing our preferences for WDC and SGP, in favour of WDC. We believe their proven ability to generate value in excess of fluctuations in underlying asset pricing and conservative capital structures should see continued operational out-performance. In the medium cap names, we continue to see value in BJT which exhibits strong capital management and RE management. A previous key pick MCW has returned 18.4% month to date, and has been downgraded to Neutral from Buy on a valuation basis.