AUSTRALIA PROPERTY INVESTMENT SEMINAR - Tourism …€¦ · AUSTRALIA PROPERTY INVESTMENT SEMINAR...

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Index Sponsor

AUSTRALIA PROPERTY INVESTMENT SEMINAR RESULTS FOR JUNE 2016

August 2016

INDUSTRY PARTNERS

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SPONSORS

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Australia Unlisted Infrastructure Index

Australia All Property Index

Australia Hotel Index

Global Infrastructure Asset Index

Unlisted Retail Fund Index Unlisted Wholesale and Retail Fund Index

Venue Sponsor

OUTLINE

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Index Market Update

Guest Speaker

Panel Discussion

INDEX MARKET UPDATE

Anthony De Francesco

Executive Director, Client Coverage, APAC

MSCI

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AUSTRALIA PROPERTY ASSET DATABASE

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1,418 assets | A$165 bn value

Abacus Property Group

ALE Property Group

Aligned FM

Amalgamated Holdings Ltd

AMP Capital Investors

APN Property Group

Arcadia Funds Management

Arena Investment Management

Australian Unity

Brookfield

BWP Trust

Cbus Property

Challenger Limited

Charter Hall Group

Cromwell Property Group

DEXUS Property Group

Eureka Funds Management

Folkestone Funds Management

Goodman

GPT Group

Grand Hotel Group

Harmony Group

Heathley Limited

IBA (Indigenous Business Australia)

IHG (Intercontinental Hotel Group)

INVESTA Property Group

ISPT

JGS Property

LaSalle Investment Management

Lend Lease Real Estate

Local Government Super

Millinium Capital Managers Ltd

Mirvac

MTAA Super

Garda Capital Group

Perron Group

QIC

Retirement Benefits Fund Board

Schwartz Family & Co

Stockland

Valad Property Group

Vicinity Centres

Vital Healthcare Property Trust

AUSTRALIA FUND DATABASE

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Participants: 102 funds | A$86 bn value

Participants: 23 funds | A$35 bn value

WHOLESALE FUNDS

AMP Capital

Charter Hall

DEXUS

Fortius

Goodman

GPT

Investa Property Group

ISPT

LaSalle Investment Management

Lend Lease

Mirvac

QIC

Valad Property Group

RETAIL FUNDS

Abacus Property Group

Alceon

APN Property Group

Arena Investment Management

Australian Unity

Centuria Property Funds

Charter Hall

CorVal

Cromwell

Denison Funds Management

Folkestone

Heathley

Investec

MAB Funds Management

Mair Group

Quintessential Equity

Sentinel Property Group

UNLISTED INFRASTRUCTURE

AMP Capital

Colonial First State Global Asset Management

Hastings Funds Management

IFM Investors

Infrastructure Capital Group

Palisade Investment Partners

Queensland Investment Corporation

Whitehelm Capital

AUSTRALIAN ALL PROPERTY RETURNS ANNUAL RETURNS ON QUARTERLY PERIODS

AUS PROPERTY MARKET HOVERS AROUND CYCLE PEAK

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Total return of 13.3% comprised of 6.5% income return and 6.3% capital return

Source: MSCI

13.3

-15%

-10%

-5%

0%

5%

10%

15%

20%

25%

Jun 2006 Jun 2007 Jun 2008 Jun 2009 Jun 2010 Jun 2011 Jun 2012 Jun 2013 Jun 2014 Jun 2015 Jun 2016

Income Return Capital Growth Total Return

10.2

10.5

19.5

10.2

10.5

19.5

13.7

AUS PROPERTY IS GLOBALLY COMPETITIVE: UK PROPERTY MARKET CYCLE IN DOWNWARD PHASE

9 Source: MSCI

Note: Japan total return is to Apr-16 only

TOTAL RETURN ACROSS GLOBAL MARKETS ALL PROPERTY ANNUALIZED RETURNS IN LOCAL CURRENCY

IPD UK MONTHLY PROPERTY INDEX ALL PROPERTY ANNUALIZED RETURNS IN LOCAL CURRENCY

ASIA PACIFIC ALL PROPERTY RETURNS ANNUAL RETURNS TO DECEMBER 2014 AND 2015

AUS/NZ OUTPERFORM ASIA PROPERTY MARKET

10 Source: MSCI

OFFICE SECTOR OUTPERFORMS IN CORE SPACE: HOTEL AND HEALTHCARE SECTORS OUTPERFORMING CORE

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PERFORMANCE ACROSS AUS PROPERTY SECTOR AVERAGE ANNUAL RETURN

11.8%

13.6% 13.3%

11.7%

14.6% 14.6%

10.8%11.8%

11.2%

13.8%14.4%

13.5%

17.2%18.5% 18.4% 17.8%

23.3% 22.9%

0%

5%

10%

15%

20%

25%

J15 M16 J16 J15 M16 J16 J15 M16 J16 J15 M16 J16 J15 M16 J16 J15 M16 J16

Total Office Retail Industrial Hotel Healthcare

capital return income return total return

Note: J refers to June and M refers to March.

Source: MSCI

CAPITAL RETURN ACROSS ALL SECTORS MAINLY UNDERPINNED BY CAP RATE COMPRESSION

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CAPITAL BREAKDOWN PER SECTOR FOR THE 12 MONTHS TO JUNE 2016

Source: MSCI

PROPERTY CAP RATES STILL FIRMING: AGGRESSIVE PRICING IN NON-CORE SECTORS

13 Source: MSCI

1%

2%

3%

4%

5%

6%

7%

8%

9%

10%

Jun-04 Jun-06 Jun-08 Jun-10 Jun-12 Jun-14 Jun-16

AUS property cap rates vs bond rateperiod ending June 2016

Industrial Office 10 YR Bond rateRetail Combined Healthcarehotel

GFC

Lehman Bros collapse

RETAIL PROPERTY SECTOR RETURNS MODERATING ...

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RETURNS ACROSS AUS RETAIL PROPERTY MARKETS ANNUAL RETURN

Source: MSCI

11.8%11.2%

9.9%9.3%

11.2%10.4%

13.2%12.8%

15.5%14.4%

17.1%

16.0%

0%

2%

4%

6%

8%

10%

12%

14%

16%

18%

M16 J16 M16 J16 M16 J16 M16 J16 M16 J16 M16 J16

Total SM Regional Regional Sub Regional N'hoods Large Form


Note: J16 refers to Jun 2016 and M16 refers to Mar 2016.

… LINKED TO SOFTENING RETAIL DEMAND

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0%

1%

2%

3%

4%

5%

6%

7%

8%

9%

10%

Dec-92 Dec-95 Dec-98 Dec-01 Dec-04 Dec-07 Dec-10 Dec-13

National retail turnover and interest rates annual nominal growth on monthly periods ending June 2016

cut in cash rate LT average MAT growth

Source: ABS and MSCI.Note: seasonally adjusted series.

recession bond market crash

Intro of GST

Housing slump

GFC

Stimulus

DIVERSE OFFICE PROPERTY SECTOR RETURNS ACROSS CBD MARKETS

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RETURNS ACROSS AUS CBD OFFICE PROPERTY MARKETS ANNUAL RETURN

Source: MSCI

14.6% 14.6%

18.3%18.8%

15.9%15.7%

10.7%9.9%

-0.2%-0.5%

13.0%14.0%

9.8% 11.0%

-10%

-5%

0%

5%

10%

15%

20%

25%

M16 J16 M16 J16 M16 J16 M16 J16 M16 J16 M16 J16 M16 J16

Total SYD MEL BRI PER CAN ADL


Note: J16 refers to Jun 2016 and M16 refers to Mar 2016.

CAPITAL RETURN MAINLY DRIVEN BY CAP RATE COMPRESSION ACROSS CBDS EXCEPT FOR PERTH

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CAP RATE IMPACT AND CAPITAL RETURN FOR THE CBD MARKETS FOR THE 12 MONTHS TO JUNE 2016

Source: MSCI

WHITE COLLAR EMPLOYMENT GROWTH AT CYCLE PEAK: VARIES ACROSS STATES

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-4.0%

-2.0%

0.0%

2.0%

4.0%

6.0%

8.0%

10.0%

Nov-04 Nov-06 Nov-08 Nov-10 Nov-12 Nov-14

White collar employment growth by stateannual MA growth on quarterly periods ending May 2016

NSW VIC QLD WA AUS Source: ABS and MSCI.

GREEN STAR RATED OFFICE BUILDING OUTPERFORMING

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TOTAL RETURN AND PERFORMANCE DRIVERS FOR GREEN BUILDINGS FOR CBD OFFICE MARKETS RESULTS FOR THE 12 MONTHS TO JUNE 2016

Source: MSCI

NABERS

4 to 6 star Sydney CBD 18.7 5.8 1.8 4.5

Melbourne CBD 15.3 5.8 4.0 4.6

Brisbane CBD 9.0 6.7 6.9 4.5

Perth CBD 0.2 6.9 4.3 5.9

GREEN STAR

4, 5 & 6 star Sydney CBD 19.7 5.6 1.3 5.0


Brisbane CBD 11.8 6.2 0.6 5.8

Perth CBD 4.4 6.6 1.7 6.7

ALL AUSTRALIAN OFFICE

Sydney CBD 18.8 5.8 3.4 4.6


Brisbane CBD 9.9 6.6 7.1 4.6

Perth CBD -0.5 6.9 12.3 5.8

TOTAL RETURN CAP RATE VACANCY WALE

INDUSTRIAL PROPERTY SECTOR RETURNS MODERATING

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RETURNS ACROSS INDUSTRIAL PROPERTY MARKETS ANNUAL RETURN

Source: MSCI

14.4%13.5%

11.3% 10.9%

19.9%

17.2%

14.1% 13.9%

16.6%15.2%

0%

5%

10%

15%

20%

25%

M16 J16 M16 J16 M16 J16 M16 J16 M16 J16

Total Distribution Ind. Estate Warehouse HT/BPs

income return capital return total returnNote: J16 refers to Jun 2016 and M16 refers to March 2016.

HOTEL PROPERTY SECTOR DELIVERS STRONG RETURNS BUT MODERATING WITH SOFTENING OCCUPANCY

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$1.2

$1.2

$1.3

$1.3

$1.4

$1.4

$1.5

73%

74%

75%

76%

77%

78%

79%

80%

81%

82%

83%

Mar-06 Sep-07 Mar-09 Sep-10 Mar-12 Sep-13 Mar-15

RevPAR versus OccupancyAustralian hotel sector, quarterly periods to June 2016

Occupancy (lhs)

RevPAR (rhs)

Source: MSCI

18.5% 18.4%18.5%

17.0%18.5%

21.7%

25.0% 25.5%

21.8%20.2%

7.9% 8.4%

0%

5%

10%

15%

20%

25%

30%

M16 J16 M16 J16 M16 J16 M16 J16 M16 J16 M16 J16

Total CBD Non-CBD NSW VIC QLD

Performance across hotel property markets

capital return income return income return

Source: MSCI

average annual return

Note: M16 refers to March 2016 and J16 refers to June 2016.

HEALTHCARE PROPERTY SECTOR YIELDS STRONG RETURNS ACROSS BOTH HOSPITALS & MEDICAL CENTRES

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23.7% 23.2%23.9%

22.7%24.6%

27.5%

21.9% 21.5%

32.4%30.7%

18.8%20.2%

0%

5%

10%

15%

20%

25%

30%

35%

M16 J16 M16 J16 M16 J16 M16 J16 M16 J16 M16 J16

Total HC PH MC NSW VIC QLD

Performance across healthcare property markets


Source: MSCI

average annual return

Note: M16 refers to March 2016 and J16 refers to June 2016.

-10%

-5%

0%

5%

10%

15%

20%

25%

Jun-06 Jun-07 Jun-08 Jun-09 Jun-10 Jun-11 Jun-12 Jun-13 Jun-14 Jun-15 Jun-16

Return performance for healthcare sector annual return on quarterly periods to June 2016

Capital return Income return

Total return All prop total return

Source: MSCI

UNLISTED WHOLESALE CORE FUNDS DELIVER RETURN PREMIUM TO DIRECT PROPERTY BUT VARIES BY SECTOR

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RETURN BREAKDOWN FOR ALL FUNDS AND FUND SECTORS ANNUAL RETURNS FOR THE YEAR TO JUNE 2016

Source: MSCI Note: the chart excludes industrial-specific funds.

BOTH REAL ESTATE AND INFRASTRUCTURE OUTPERFORM EQUITIES

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FUND LEVEL, DIRECT ASSET LEVEL AND REIT PERFORMANCE ROLLING ANNUAL RETURNS FOR QUARTERLY PERIODS

Source: MSCI

INFRASTRUCTURE INVESTMENT RETURNS HAVE BEEN STRONG BUT MODERATING

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-10%

-5%

0%

5%

10%

15%

20%

25%

30%

Jun-02 Jun-04 Jun-06 Jun-08 Jun-10 Jun-12 Jun-14 Jun-16

Returns for AUS unlisted infrastructure fundsannualised pre-fee returns on quarterly periods to June 2016

Distributed income returnCapital returnTotal return

Source: MSCI.

0%

5%

10%

15%

20%

25%

30%

Mar-09 Mar-10 Mar-11 Mar-12 Mar-13 Mar-14 Mar-15 Mar-16

Return for global infrastructure asset segmentsannual return on quarterly periods to March 2016

Global Transport Power Contracted UncontractedSource: MSCI.

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AUSTRALIA PROPERTY INVESTMENT SEMINAR - Tourism …€¦ · AUSTRALIA PROPERTY INVESTMENT SEMINAR...

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