Six real estate funds rate highly as investment options: SQM

The research house rated eight property fund managers out of a possible 26 (19 declined to be rated), with six achieving a score of four stars are higher.

A score of between four and 4.25 indicates “superior” quality, while 4.5 and above indicates “outstanding” quality.

The highest rating was achieved by BT Wholesale Property Securities Fund, which maintained its 2010 rating of 4.5.

The $109 million fund invests primarily in Australian listed property trusts, developers and infrastructure investments, both directly and indirectly.  Over the last two years it has delivered a return of 8% per annum.

Three funds achieved a score of 4.25 including the listed APN AREIT Fund, which was one of two funds to improve its 2010 rating of four stars.

The Perpetual Property Securities Fund improved its rating from 3.5 (“average”) to 3.75 (“good”).

Of the eight funds that chose to be rated by SQM the Maxim Property Securities Fund was the only one to suffer a ratings downgrade from 3.75 to 3.5.

The rated funds achieved a median rating of four stars, steady on last year, which SQM described as an “excellent achievement reflecting the quality of fund managers under review”.

SQM managing director Louis Christopher says the managers rated in this cycle represent the cream of the industry.

“They represent some of the very best real estate fund managers operating in this country and around the world today. Many of them have delivered value to their fund even while, in the past four years, the A-REITs markets have provided the most difficult investment climate ever recorded.

“As the list reveals there are many managers offering funds in the domestic property securities fund space and many of these managers have not sought a rating from us. Sometimes, it is even more revealing those managers who choose not to be rated by us verses who do choose to get a rating. Unlike some of our competitors, we are recognised as being fairly conservative in our ratings process.”