Monthly Newsletter August 2018

  • In August, the Fund gained +0.8%. This return is around expectations given our conservative positioning towards higher yielding rent collectors with recurring income and away from Trusts relying on development profits.
  • The Australian Listed Property had a strong month in August though this was primarily driven by those Trusts with a large proportion of development earnings, which historically expand earnings towards the end of a housing boom. As developers such as Goodman are trading on 20 times forward earnings, the market is effectively assuming that this source of profits will both grow and continue indefinitely. We view that as a heroic assumption, given the visibly cooling Australian residential market.

Go to Monthly Newsletters for a more detailed discussion of the listed property market and the fund’s strategy going into 2019.