This was published 7 years ago
Corporate activity and economic fundamentals will dominate reporting season
Takeovers of real estate investment trusts at the smaller end of the index are dominating the headlines in the lead-up to the full-year reporting season starting in mid-August.
Fund managers have said they expect a flat to slightly higher earnings for the 2017 financial year, with retail trusts feeling more pressure from sluggish sales and the potential impact of Amazon, while office and industrial landlords are rising much higher in demand from tenants.
Martin Place is being dubbed Silicon Place due to the new tech office tenants.Credit: Getty Images
The portfolio manager at Quay Global Investors, Justin Blaess, said real estate fundamentals, supply/demand and management actions will have a bigger influence on listed real estate returns over the longer term.
"Over the longer term it is difficult to see any relationship between interest rates and listed real estate returns," Mr Blaess said.
"Australia is a market we are particularly wary of. Imbalances in the Australian residential market are creating risks and this is likely to have an impact on other sectors including office, retail and industrial."
But property analysts said office rents in Sydney and Melbourne are stronger due to the lack of supply, with any excess space being snapped up by the "new" entrants of co-working spaces and tech companies and start-ups.
According to JLL research report, Tech firm office location choice has outlined three factors affecting location choice for tech firms: access to talent pools, supportive government policy, and cost.
JLL's NSW head of office easing, Dan Kernaghan, said there has been a recent innovation push in Australia with the government throwing support behind start up incubators and accelerators.
"Technology firms have leased space in quality prime office buildings, and we have observed that they have chosen to cluster in close proximity to each other in and around Martin Place," Mr Kernaghan said.
"More so, serviced office providers such as WeWork and Regus have leased space close to these technology firms. This is a common theme in global cities such San Francisco, New York and London."
It is expected the top 10 REITs will look to expand on the rise of technology tenants in malls, warehouses and office towers when they issue their results next month.
JLL's Australian head of research Andrew Ballantyne said he has started to refer to Martin Place as "Silicon Place" after the clustering of tech-related firms in the precinct.
But the corporate activity will still dominate.
The most recent is the tussle for control of the $207 million Asia Pacific Data Centres Trust by Tony Pitt's 360 Capital group.
Shareholders are due to vote on proposals later this month that enable 360 Capital to take over management from APDC and grow into the data storage market. But Proxy adviser ISS has recommended against the 360 Capital plan.
In another similar battle, Ardent Leisure is fending off corporate raider Ariadne, and they also face off at an extraordinary shareholder meeting on September 4.
Ariadne says in its latest statement to Ardent investors that it has a proven track record of improving businesses and "together with our board nominees Dr Gary Weiss and Kevin Seymour, we have put forward for nomination two additional independent directors with the experience and skills essential to improving Ardent's performance."
"In our view, it would be far more beneficial for all Ardent security holders for Ardent's board to work constructively with us to introduce fresh and much-needed skills on the board and, importantly, bring a level of significant ownership representation at board level for the benefit of all security holders," Dr Weiss said.