Investec Property Fund may be missing out in Australia
Trust says Europe offers the most attractive returns on capital, but investments in Oz have been outstanding
Investec Property Fund (IPF), the real estate investment trust spun off and listed by financial services group Investec in 2011, needs to make a call on Australia.
It perhaps needs to spend more capital Down Under as it looks to hedge against the weak rand, especially considering how well the investment there has done.
The company owns nearly 21% of Investec Australia Property Fund (IAPF), an investment which has paid off over the past six years, paying dividends in Australian dollars.
IPF’s capital growth has been impressive. In the year to March its investment in IAPF had climbed 21% in value to R1.27bn from R1bn at the same time last year.
Nevertheless, R1.27bn is a relatively small portion of total investments of R20.9bn. Why has IPF not invested more in IAPF or in other Australian companies, given its strong track record there?
As much as R17bn of IPF’s properties are in SA while only R3.18bn of the portfolio is in Australia, Europe and the UK. IPF says Europe offers the most attractive returns on capital at the moment. That may well be the case, but hopefully it will not be at the expense of missing opportunities in Australia.