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Investors pump $2b into property stocks on COVID vaccine update

Investor property stocks

Investors have pumped $2.2 billion into the listed property sector in a sign of renewed hope a successful coronavirus vaccine trial will allow workers to return to offices and shoppers to malls sooner than expected.

In a busy day of trade on Tuesday, shares in mall landlords soared more than 10 per cent on the ASX after Pfizer and BioNTech released news their COVID-19 vaccine achieved a success rate of more than 90 per cent in preventing infections.

Shares in retail and office property companies have mostly been negatively impacted by COVID-19, with prices slumping between 33 per cent and 43 per cent from their February highs.

But news of an effective vaccine saw office owners such as Dexus, Mirvac, Charter Hall, GPT and Centuria’s office funds move back into the spotlight. The ASX’s REIT index rose 2 per cent Tuesday, outperforming the overall market’s 0.7 per cent gain.

Grant Berry, head of real estate at SG Hiscock, said the renewed confidence was a shift in sentiment for REITs, which he expects will continue.

“I see this has the potential to be a rotation story into real assets, with more confidence the COVID-19 situation and positive developments in the vaccine will accelerate the shift back to normality,” Mr Berry said.

REITs are starting to offer earnings guidance again and valuers may look at their assets with less negativity during the next round of valuations, he said.

Shares in retail landlords Scentre and Vicinity leapt 13.7 per cent and 14.2 per cent respectively as the good news rolled through the sector.

But, having been the darling of the market during the pandemic, industrial landlords like Goodman lost ground on the premise consumers may opt less for online and more for bricks and mortar malls.

In a note to clients early Tuesday, Macquarie Equities’ Stuart McLean said the American S&P 500 index had risen 2.7 per cent on the back of the news, with the REIT sector rising 4.3 per cent.

Mr McLean said the dispersion in REIT performance in the US was stark, albeit unsurprising, with retail REITs surging 23.5 per cent and office REITs lifting 13.4 per cent, while industrial REITs fell 2.7 per cent.

“We previously adopted a barbell strategy in the REIT sector, with outperform recommendations across both value and growth,” he said.

Office stocks, such as GPT and Lendlease, and retail landlords Vicinity and Scentre are likely to benefit most from a vaccine in the short term.

“While growth stocks are likely to see some weakness, we still see attractive medium-term outlooks for Goodman and Charter Hall,” Mr McLean said.

Another analyst said retail landlords were the main beneficiaries of the vaccine news as shoppers will be able to flock to malls, not just to shop, but also to eat in the food courts and go to the cinemas.

Office markets are undergoing a structural change and most companies will need to offer a hybrid working from home and office model to retain and attract staff in the future, they said.


The post “Investors pump $2b into property stocks on COVID vaccine update” by Carolyn Cummins appeared first on the Blog


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Yeronga trophy home fronting the Brisbane River listed

Brisbane River

A riverfront Yeronga, Queensland trophy home has been listed without a price guide.

The five bedroom, five bathroom abode is being marketed by Heath Williams and Nick Hurwood of Place.

Situated at 363 Brisbane Corso, the tri-level home fronts the Brisbane River.

Set on 916 sqm, it features two swimming pools and a private boat pontoon.

Other features include full-height stacked glass sliding doors opening out to a covered balcony which capture sweeping Brisbane River views as well as a ground-level rumpus or games room equipped with a bar, a projector and a linked balcony.

It is located seven kilometres from the CBD.


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Brisbane houses solid but inner-city unit market oversupplied: RiskWise

Brisbane houses

The impact of COVID-19 on the property market is greatly varied across this large state.

COVID-19 has significantly increased the unemployment rate in Queensland with a greater impact on regional areas, particularly those with a heavy reliance on tourism. As of August 2020, the unemployment rate was 7.5 per cent.

The sustained period of the border closure between Queensland and other states has been a contributing factor to the already substantial impact of COVID-19. This is due to the strong connection between Queensland and New South Wales and, to a lesser extent, Victoria.

COVID-19 has helped strengthen ‘work from home’ opportunities, meaning owner-occupiers can take advantage of ‘lifestyle’ prospects instead of being tied to employment hubs.

Before COVID-19 hit, there was already a strong trend of sea- and tree-change homebuyers looking for the best of all worlds – lifestyle, accessibility to employment hubs and affordable housing.

In Queensland, the areas that attract those lifestyle buyers include the Gold Coast and Sunshine Coast.

Beachside suburbs especially outperform the market as they offer fantastic lifestyle opportunities.

However, while solid house price growth may be experienced in Brisbane, the inner-city unit market remains oversupplied and, therefore, high risk.


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Whitsundays prestige market strong amid COVID uncertainty: HTW

prestige market
The high end market in the Whitsundays is performing well despite COVID and what’s happening in other areas of Australia, with lifestyle properties being sought after, according to the November report from valuation firm Herron Todd White.
HTW found that rural residential lifestyle properties are being snapped up with sales ranging from $800,000 to over $1 million.
Properties with ocean views or frontage are also being snapped up along with vacant lots in similar locations.
“There have also been two sales in the prestige unit market, both selling for over $800,000,” the Queensland-based Herron Todd White valuer Noelene Spurway said.
“We expect that once the borders are open, lifestyle properties will continue to move as the lifestyle in the Whitsundays is second to none.”
Spurway did however jest that she is maybe just a little biased.
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