Advisers getting over direct property fear

Self-managed super fund (SMSF) trustees are swarming to direct property investment, aided by a gradual warming of advisers to the asset class.

Speaking at the launch of Charter Hall’s second direct industrial fund (DIF2) in Sydney today, the property group’s retail investor division head Richard Stacker said direct property was benefitting from an exodus away from cash.

“Investors and advisers are coming back [to direct property] because they are looking for an alternative to cash,” he said.

“Many advisers’ clients had a tough run in property immediately post-GFC and some of that caution is still there and there are some that may not ever invest in direct property again,” he conceded.

“But there are others who are coming back, those that have taken on board the lessons learned during this period and are opening up to the obvious benefits.”

Mr Stacker said that while SMSF trustees were “leading the charge back into property,” and Charter Hall was seeing a rise in direct investment, this uptick is still “largely being driven by advisers”.

He said advisers play an important role in educating investors and providing them with information about direct property investment.

“Direct property has a compelling investment case and the asset class is well placed given the historically large positive spread between property yields and debt costs, long leases and sensible debt and liquidity structures,” Mr Stacker said.

As much as 60 to 70 per cent of the interest in the retail option of the DIF2 has come from the SMSF sector, with interest also being received from boutique advisory firms and the major dealerships.

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