The OPM property fund outperformed the IMA property sector average by more than 20 per cent in the six months to October 1, after benefiting from its investment in real estate investment trusts.
The OPM fund returned 45.62 per cent while the sector average was 24.96 per cent. The fund also outperformed the sector in the nine months to October 1, with 25.43 per cent against 10.22 per cent average.
OPM says property assets were hit hard in 2008 but the Reits’ sector experienced a recovery in share prices in which it fully participated and some of the real estate trusts are now trading on significant premiums to their net asset values.
Reits tend to perform strongly at the start of the cycle. OPM says many have performed strongly following rights issues to repair balance sheets and adds that this fundraising has provided some Reits with useful firepower to buy new property. It does not believe Reits are a spent force as some offer potential growth from re-rating are are still trading on big discounts.
The vehicles allow the OPM fund exposure to Asian property. Examples include Trikona trinity capital, an Indian infrastructure Reit specialising in warehousing in India, Macau properties which aims to invest in development of gambling facilities in China and Vietnam infrastructure.
Fund manager Tony Yousefian says: “We have done well out of Reits. If I was being cynical, I would say it just goes to show how oversold Reits were. They are now coming back to some sort of normality, which has been well received by the market.”