Close
Leave Feedback
Welcome to the new btim.com.auTake a two minute tour to see what we've changed
Hi there! Welcome to the new look Pendal website... Take a two minute tour to see what we’ve changed.
Mainstream Online Web Portal
LoginInvestors can view their accounts online via a secure web portal. After registering, you can access your account balances, periodical statements, tax statements, transaction histories and distribution statements / details.
Advisers will also have access to view their clients’ accounts online via the secure web portal.
The Point
Quick, actionable insights for investors
Australian Equities
FAST PODCAST: How to choose the right mid-cap Aussie stocks
The development of a decarbonised economy will take a long time.
But that doesn’t mean it’s not a critical factor right now, says Pendal portfolio manager Brenton Saunders.
The ESG transition can be divided into three periods, says Brenton:
- The existing status quo
- A transition period with an overlap between old and new technologies
- A transition to the new
“Once you understand that, it’s really about characterising companies in terms of where they sit in these transitions,” says Brenton, who manages Pendal MidCap Fund.
“Are they making their way across those phases to an environment where they can contend with the decarbonised, ESG world? Or are their business models fairly constrained to one of those thematics?
“We are very careful about how and if we invest in those latter sectors because this transition will take place over the course of the next 10 years. That’s definitely within the context of an investible timeframe.”
FAST PODCAST: The investment outlook for Aussie REITs
Play podcastFAST PODCAST: The investment outlook for Aussie REITs
Australian Real Estate Investment Trusts could be reasonable value at the moment, “factoring in where we think interest rates will go”, says Pendal portfolio manager Julia Forrest in our latest fast podcast.
“We’re not expecting any severe stress in the sector, unlike in the GFC.
“The sector is reasonably well positioned. It’s offering a reasonable dividend yield – 5% to 6% for the yield for the stocks that we like.
“There is still some earnings growth coming through for some of the larger mall landlords.
“Given what we’ve seen happen in the last two years – and the concessions that they’ve made to tenants for rents during Covid – we will see some rents coming back.
“It will to some extent be moderated by rising cash rates and what that does to debt cost going forward.
“But the sector is reasonably well positioned.
“I think management still have the GFC in their corporate memories and have positioned their portfolios accordingly.”
FAST PODCAST: Speedy shoppers are buying more but not hanging around for long
Play podcastFAST PODCAST: Speedy shoppers are buying more but not hanging around for long
“If you look at the performance of the REITs sector during the month of February, retail was actually the strongest sector.
Even though there was a lot of disruption during the period because of Covid – and there was rental relief granted and earnings were a bit softer – the actual operating metrics themselves were improving.
So you’ve seen improving occupancy levels, leasing spreads are improving, interest in pre-leasing is improving.
Interestingly, we’re still seeing foot traffic down 20 per cent on 2019 levels, but it’s been more than compensated by the average spend which is up about 30%.
So people know what they’re going to buy when they go to shopping centres. They’re not there for particularly long. They don’t go as often as they used to, but they spend more.
Why self storage could be a good place to stash some cash
Quick view
Why self storage could be a good place to stash some cash
“The world of self-storage is not something you often hear about, but it’s an asset class we like,” says Pendal PM Julia Forrest, who co-manages property investing in Pendal’s Aussie equities team.
Record high immigration and a downsizing trend towards apartment-living should fuel ongoing strength in the self-storage industry, says Julia.
“Self-storage space in Australia represents 2.1 square feet per capita. In the US, it’s closer to 6.1 square feet per capita.
“So, in terms of available space, Australia is relatively under-serviced. There is a bit of a runway to catch up.”
Julia points to the example of ASX-listed National Storage REIT – her biggest active position in Pendal’s property strategy.
National Storage (ASX: NSR) is Australia’s biggest self-storage owner-operator with 230 centres across Australia and New Zealand.
Julia Forrest: Retail and industrial lead the way in A-REIT sector
Quick view
Julia Forrest: Retail and industrial lead the way in A-REIT sector
A surprising rebound for shopping malls was the standout feature of this year’s real estate investment trust reporting season, says Pendal’s Julia Forrest.
Rising interest rates and the expiration of interest hedges meant earnings declined for many Australian REITs, surprising investors in a sector where performance is typically well-flagged.
“But the positive surprise was in shopping malls where operating metrics improved,” says Julia who co-manages Pendal’s property trust portfolios.
“Occupancy is pushing towards completely occupied – that’s a long way from where we were two or three years ago.
“There’s genuine demand by tenants for more – and better – space and there’s been no supply for four or five years so you’re seeing competitive tension between tenants.”
A rising population and wages growth has sent retail sales 15 per cent above 2019 levels.
Office property opportunities can still be found as work-from-home tensions play out
Quick view
Office property opportunities can still be found as work-from-home tensions play out
Office space is on the mind of many businesses as WFH tension between workers and bosses plays out.
The market is continuing to evolve, providing plenty of challenges – along with some opportunities, says Julia Forrest, co-manager of Pendal’s property portfolios.
“It’s been very hard to get people back into the office,” Julia says. “And it seems to be more difficult in Melbourne than anywhere else.”
“Physical occupancy in Melbourne is running at about 47 per cent, but recently there’s been some big employers mandating staff to be back in the office 50 per cent of the time,” she says. “That will help.
“Physical occupancy is still low in government because staff have only been mandated to come back to the office one in every five days.”
There are still opportunities in commercial property, though.
Julia points to newly developed 555 Collins Street in Melbourne. It has a good range of tenants including Amazon, will open close to fully tenanted and the construction contract was well negotiated.
Julia Forrest: Where to look for opportunities in listed property
Investing in listed property when bond yields are higher – and recession fears abound – may sound challenging.
But there are opportunities for REITs investors who know where to look, says Julia Forrest, who has co-managed Pendal’s property trust portfolios for more than a decade.
“You want a portfolio with inflation protection, and you want to own assets that have pricing power.
“We are over-weight supermarket-based shopping centre REITS, because the big supermarkets have reasonable pricing power and demand is fairly resilient.
“We are also overweight logistics and industrial REITS.
“The landlords have pricing power because the vacancy rate is so incredibly low. Their ability to charge market rents means you have reasonable earnings growth and protection against inflation.”
JULIA FORREST: What to look for in ASX-listed property
Quick view
JULIA FORREST: What to look for in ASX-listed property
It was a strong reporting season for ASX-listed property largely due to a post-pandemic bounce-back, says Pendal portfolio manager Julia Forrest.
Owners of shopping centres and property fund managers were the stand-out sectors, though office trusts still struggled.
Higher interest rates will have negative effects on the property sector, but locally many Australian Real Estate Investment Trusts have hedged against higher debt costs, and offer reasonable value, Julia says.
“The sector looks reasonable value. It’s trading at around 15 times which is a discount to the all-industrials.
Work-from-home is still impacting office space “though there’s a sense it has started to improve in the past couple of weeks”.
ESG: Why investors need a new way to engage with companies
Quick view
ESG: Why investors need a new way to engage with companies
Engaging with investees is at the core of sustainable investing.
But the ESG-related issues facing companies are now so complex that investors need another approach, says Regnan’s Alison Ewings.
Company-specific engagement remains important for driving direct outcomes, says Alison, who heads up engagement at sustainable investing leader Regnan.
But many aspects of meaningful change can only come when businesses, not-for-profits, researchers and governments share information and co-ordinate action, she says.
Agriculture is a case in point, with complex sustainability issues across the value chain including climate change, soil health, pollution, water scarcity, food waste and biodiversity and eco-system loss.
“A system-wide approach is going to be required in order to change complex value chains which stretch across our entire economic and social system.”
Regnan last month hosted its first Director Roundtable on Sustainable Agriculture, bringing together senior executives and directors to identify barriers to sustainable agricultural and food production.
Loading posts...