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selling has declined in markets such as the US over continental European property stocks, previous year. This report is not a
and the UK. This is partly due to companies’ about which the report is guardedly optimistic recommendation to buy or sell these stocks.
moves to redress balance sheet weakness by that the listed property market will bottom out
raising capital or cutting dividends,” explains in the second half of the year. In North
Shaun Stevens, Fortis Investments’ Investment America, returns are likely to be muted at best,
Top 10 June 2009
specialist in property and author of the report. due to the strong rebound in markets,
Top 10 Buy Top 10 Sell
This recovery in property equities contrasts continued decline in property operating
1 Bank of America Bank of America
markedly with the continued deterioration in metrics and the dilution caused by leveraging.
2 Arcelor Mittal Citigroup
the wider direct property markets, however. In Asia, property equities are expected to
3 Barclays Arcelor Mittal
Property values declined and rents fell in key retrace most of the gains experienced year-to-
4 Lloyds Apple
markets in each region in the first quarter of date as investors primed for an immediate
5 Total Barclays
2009. As a result, weaker rental growth and recovery are disappointed by earnings.
falling occupancy rates will undoubtedly Longer term, Stevens assures us that there are
6 Citigroup Lafarge
reduce the earnings potential of landlords in compelling reasons for why property should
7 General Electric Macy’s
both the listed and private markets. continue to be an important component in the
8 Dexia Palm
Indeed, the report underscores that values in portfolios of strategic investors. “Listed
9 Royal Bank of Royal Bank of
direct markets are still falling and conditions in property securities are an asset class in their
Scotland Scotland
the wider economy will keep downward own right,” he says. “They offer diversification
10 Fortis BNP Paribas
pressure on rents for the foreseeable future. opportunities in a multi-asset portfolio and
Consequently, the earnings outlook for the preserve many of the desirable characteristics DISCLAIMER
listed property sector remains tepid. of holding direct property over a range of This document has been prepared solely for
Nevertheless, the basis for a sustainable property markets.” informational purposes and does not constitute
recovery in global property securities is in an offer to buy or sell, or a solicitation of an offer
sight. Stevens comments: “Signs that the Internaxx Top ten buys and sells to buy or sell any security or financial
deterioration in economic fundamentals is –International Investors Activity instrument, or any investment advice. Prospective
slowing suggest that the property sector is likely summary from Internaxx investors should conduct such investigations as
to stabilise in the second half of 2009.” deemed necessary and should seek their own
In particular, the report is positive about UK The 2008 Top Ten buys and sells are measured legal, accounting and tax advice to determine
property equities, where longer lease lengths as the total number of trades carried out in independently of the suitability and consequences
and higher-quality portfolios are an advantage each stock by Internaxx clients over the of an investment.
July/August 2009 Investment International www.investmentinternational.com
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