Direct property, particularly direct retail property, has historically provided investors with attractive returns and low volatility when compared with other investment classes.
Australian investors value direct property for the following reasons:
- Reliable Income Streams are required to support those seeking income and capital stability;
- Stability of Property with relatively low volatility and natural inflationary hedge characteristics. Property rents tend to increase in line with inflation;
- Strong Tax Advantages are available from property which significantly improve investors’ after-tax returns;
- Portfolio Diversification Benefits – Direct property is an essential part of any balanced investment portfolio. It is the only major asset class that has historically tended to move in different cycles to other main asset classes of share and bonds. This means that by including direct property in an investment portfolio, investors may benefit from the reduced risk that comes with diversification; and
- Capital Stability – Direct property is based on underlying property valuations and has shown more stable capital returns than listed property which has displayed a similar level of volatility to equities over the last ten years.
Centro MCS and Diversification
Investing with Centro MCS carries several key benefits, including the following three forms of diversification:
Diversification Through Multiple Retailers – Centro MCS shopping centres generally house multiple retailers that are supported by secure anchor retailers on long term leases. As a whole, the Centro MCS portfolio has exposure to large national Australian retailers such as Coles and Woolworths and a host of smaller national and independent retailers.
Geographic Diversification – With a diverse asset base of 72 shopping centres located across all Australian states and New Zealand, the Centro MCS portfolio can also expose investor’s capital to a wide spread of domestic and offshore economic regions.
Diversification by Centre Type – Centro MCS’s broad retail asset base exposes investors to a variety of shopping centre types, including regional, convenience and neighbourhood centres.