Listed property companies are proving an attractive investment with people looking for income during times of low interest rates, Craigs Investment Partners broker Chris Timms says.
The companies were providing reliable income and although they were shares, they lacked the volatility of other listed companies.
''They are very gentle in their movements, both up and down. Property companies have had a good run as people search for income. They have had better income returns than other New Zealand shares.''
One of the benefits for those seeking regular income was the property companies usually paid out every three months, a similar trait to bonds.
''You can elect to buy a listed property trust as a portfolio asset which is a very different from buying a rental property. The listed property has more liquidity and property and if I need to take out 1000 shares I can, and I don't have to cut off the spare bedroom or porch on my rental to sell and get the money.''
Listed property also provided a wide range of investment options, from hospital and medical buildings, high-end property in Auckland and industrial property, Mr Timms said.
Although listed property trusts offered a solid outlook, earnings and dividend growth was expected to be minimal for the next two years.
Investors should consider the sector as a yield play rather than relying on any significant capital growth. An important theme this year could be rising asset values and in that regard, investors should favour internally managed vehicles such as DNZ Property and Argosy Property.
Argosy was trading at 90c a share in December and last traded at $1.02. It had provided a dividend yield of 6%, at current values. For those buyers at 90c, they had enjoyed capital growth as well as income, he said.
In the latest DNZ announcement, chief executive Paul Duffy said the company had a 99.6% occupancy rate.
''This outstanding occupancy rate, combined with a weighted average lease term of 5.2 years, provides an excellent base for the next 12 months.''
At March 31, DNZ had a portfolio value of $667 million, 48 properties and 258 tenants, he said.
DNZ recently completed its annual independent market valuation of the company's portfolio, with the value increasing by a net 2.4%, or $15.7 million. Following the valuation, the company's bank-loan-to-value ratio (LVR) was 36.9%, Mr Duffy said.
Goodman Property Trust announced it had finalised development commitments totalling $11.4 million. The largest of the new projects was a tailored office and warehouse to be built for Tiro Group at Highbrook Business Park, Auckland.
Goodman chief executive John Dakin said a strengthening economy and improving business confidence were reflected in the current levels of customer inquiry, with more than $80 million of new development projects starting in the last 12 months.
Goodman was also undertaking expansion works in Christchurch with a new 1800sq m warehouse being build for Carter Holt Harvey at its packing facility in Hornby for a total cost of $1.1 million.
