Australia unlisted property funds turn positive in 4Q

SYDNEY: Australia's unlisted property funds posted positive returns in the fourth quarter -- their first since August 2008 -- on fewer property valuation write-downs, property research firm IPD said on Jan 19.

Unlisted property funds delivered a total return of 0.1% in the three months ending in December but annualised returns were a negative 9%, according to the Mercer/IPD Pooled Property Fund Index, which tracks 14 unlisted funds managing around A$20 billion (RM61.8 billion).

"Capital returns are still negative but improving," said Anthony De Francesco, IPD's managing director for Australia and New Zealand. "The unlisted property sector appears to be moving beyond the trough of the property investment cycle."

Australia's unlisted property funds struggled to raise fresh capital last year as returns turned negative and have been forced to reduce or suspend dividend payments to cut debt.

Meanwhile, listed property firms managed to raise nearly A$12 billion of fresh equity.

Annualised returns for unlisted property funds bottomed out at a negative 13% in mid-2009 but it may take another year for annualised returns to turn positive, Francesco said. – Reuters