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LPTs have their day

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By Reporter
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2 minute read

Investors love affair with listed property trusts (LPT) may soon be over.

Interest in listed property trusts (LPT) may soon dip with an industry executive claiming the sectors good run would soon come to an end.

Bridges Financial Services head of research Justin McLaughlin said while the sector had been a recent star performer, it was now the time for investors to sell out of the asset class and take some profits.

"While investors may find it emotionally hard to sell out of an asset that has performed so strongly over recent years, we believe now is the time to do so," he said.

"Property has become a victim of its own success. Prices have run too far, too fast and pushed values above reasonable levels. Prospects for future price rises now seem limited.

"Disciplined re-balancing in times such as these is how wealth is not only created but more importantly retained."

Last year, LPTs returned 39 per cent with an annualised return of 17 per cent pa over the past 10 years. Investors are now only getting yields of around 5.5 per cent in LPTs, which is below the 6.23 per cent yield available in bond markets.