The key benefits of investing in direct property include:
Portfolio Diversification Benefits – Centro believes that Direct Property is an essential part of any balanced investment portfolio. This is due to it being the only major asset class to historically move in different cycles to the other main asset classes of shares and bonds. By including Direct Property in an investment portfolio, investors can benefit from the reduced risk that comes with diversification.
Chart 1. [PDF document]
Chart 1: Australian Asset Class Performance (Jun 1984 - Mar 2006)
Source: Atchison Consultants
Stable Income Streams – Direct Property suits investors seeking regular income streams with low volatility and capital stability. This is particularly relevant for investors seeking to maintain wealth in retirement.
Strong Tax Advantages – Direct Property offers significant tax advantages which significantly improves investors' after tax returns. Tax benefits flow from tax deductions available from depreciation of building, plant and equipment and the amortisation of establishment costs.
Hedge Against Inflation – Often, retail property rents will increase in line with inflation. This means that rental income is keeping pace with rises in the cost of living and is providing investors with a natural hedge against inflation. Frequently, as rents increase, the value of the property goes up.
Why Invest with Centro?
Experienced Retail Property Specialist – Centro specialises in the management of retail property. We believe managing shopping centres is a business not just an investment and have developed the required expert skills to effectively manage, lease and redevelop shopping centres to generate optimum returns. Centro’s policy of managing each property directly, as opposed to outsourcing the function to an agent, provides a competitive advantage in maximising the performance of the properties and returns to investors;
Proven Performance History – Centro MCS, Centro's syndicate division, has an impressive long term performance record. An equal investment in every Centro MCS property syndicate (managed for more than one year), would have earned you a total annual return of 26.3% for the three years ending 30 June 2007;
Centro Co-invests with You – Centro aligns its interests with investors by maintaining an investment of 25% or more in each of its investment products. This ensures that our interest is strongly aligned with your interests as investors;
Liquidity of Investment – Centro has developed a unique exit mechanism to provide investors with liquidity for their direct property investments. As Responsible Entity, Centro guarantees you will be able to sell your investment at the published net asset backing at the end of the syndicate term, if that is what you wish to do. This exit mechanism is available in all recent syndicates invested by Centro. This exit mechanism gives you certainty when planning your financial affairs.