Centuria Capital chief executive John McBain says there is a "screaming wall of cash" heading towards the property market, and his company plans to be ready as it prepares to diversify into listed property.
The company recently announced the appointment of Nick Collishaw, who starts in May, as chief executive of listed property within the group.
Mr McBain told InvestorDaily there are currently around $5 billion to $6 billion invested in term deposits that will be looking for another outlet in the next 12 months or so - and he expects property to form a significant part of that.
The group currently has around $1 billion in 30 discrete closed ended property trusts containing about 50 properties. With direct property rarely occupying more than about 4 per cent of any portfolio, the group has had to work hard to build that $1 billion, Mr McBain said.
The group has had an eye on the listed property space for around 15 years but all the stars needed to be in alignment before it could make a move, he said.
For example, there needed to be continuing value opportunities in the marketplace and the continuance of reasonably priced debt. The rental market needed to have its values aligned with net tangible asset values rather than being at a huge discount, and there needed to be pent up demand in the sector for a differentiated offer.
"I think there's genuine demand for something new," Mr McBain said.
The last piece of the puzzle would be finding someone appropriate to run the business and make it possible, which is where Mr Collishaw fits in, he said.
"There's a lot of stars that have to line up - we've been looking at it for the 15 years we've been in business and we think this is the year," he said.
Mr McBain anticipated the launch of a real estate investment trust this year - "sooner rather than later".
