LaSalle targets Australia listed property trusts(2)

As REITs in the US and Japan look increasingly stressed, the chief executive of LaSalle’s Asia Pacific securities division argues there are growing opportunities in Australia’s listed property sector as the industry feels the impact of the credit crunch.

LaSalle Investment Management is targeting listed property trusts in Australia after warning the country’s property securities market had been “hard hit” by the turbulence in the credit markets.

The Chicago-based real estate investment firm said in a report, called the Diversification Benefits of Global Property Securities, that despite historically performing more strongly than global equities and bonds, the industry was now experiencing a “huge discount to net asset value.”

Author of the report, Todd Canter, chief executive officer of LaSalle’s securities arm in Asia Pacific, said volatility in the listed property market in Australia – which has dropped 45 percent this year – was presenting real estate investment firms with unique opportunities.

Teamed with falling values in US and Japanese REITs and the UK listed property sector, Canter went on to say during a media briefing in Sydney that investors had a “unique opportunity to buy some of the world's best real estate companies at incredible discount to net asset value.”

Last week, US senior housing REIT, American Land Lease, became the latest company to announce a strategic review of its operations, including a possible sale of “some or all” of its 7,500 senior housing sites in the US. Australia's Macquarie Group is also soliciting potential buyers for its Singapore-listed trust, Macquarie Prime REIT. The REIT has had a “number of indicative proposals from third parties,” according to the firm.

LaSalle last month closed its fifth real estate vehicle, LaSalle Income & Growth Fund V, on $728 million (€470 million) of equity commitments. With leverage, the firm believes the value-added fund will have a purchasing power of close to $2 billion. It will focus on the US office, apartment, industrial and retail sectors.