SYDNEY: Direct ownership of property in Australia has delivered higher returns than listed property trusts or fixed interest products, an industry association said on Oct 13.

Owning property directly has yielded total returns of 10.1% over the past 10 years, compared with 2.1% for real estate investment trusts (A-REITs), Australian Direct Property Investment Association (ADPIA) and consulting firm Atchison Consultants said in a report.

Fixed-interest products yielded 6.1% over the same period and cash 5.7%.

The report comes as some unlisted vehicles investing in direct properties struggle to refinance debts.

"Gearing over the longer term is rewarded, but requires considerable management skill and restraint. Problems with gearing have arisen as managers continued to borrow as property values rose," ADPIA president Linden Toll said in a statement.

The report showed that A-REITs returns outperformed directly owned property from June 1989 to June 2007, but after the market downturn from July 2007, returns from direct property were stronger.

Over the five years to June 2009, directly owned property achieved a 9.8% total return against a negative 8.6% for A-REITs, according to the report. -- Reuters
SHARE
SPONSORED CONTENT
Strategically located and seamlessly configurable, TuJu @ KL Duta North caters to multi-generational living

Want more freedom in deciding how your living space looks? TuJu @ KL Duta North throws open the doors to a revolutionary concept — configurable living space. Here, you choose how you use your home unit, and seamlessly reconfigure it as your needs evolve.

read more