Influence of the gpt group on the australian property market PDF

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THE INFLUENCE OF THE GPT GROUP ON THE AUSTRALIAN PROPERTY MARKET
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Disclaimer
This is a working paper and represents the research in progress. The paper represents the
opinions of the author and it is a product of academic research. Any errors in the paper are the
faults of the author and are not meant to represent the position or opinion of anyone.
Executive Summary
The Australian Property Market has experienced quite some unprecedented challenges over the
past years. The study depended on secondary information to obtain relevant information.
However, the GPT group has played an important role in the property market in Australia. The
group has delivered a strong return on asset development as well as management through its
extensive experience in real estate. It has also influenced the property market in Australia by
enabling investors to benefit from the commercial activities they perform. It has been shown
from the results that the GPT portfolio is comprised of office, logistics and retail sectors. The
retail portfolio of GPT is well located with a 99.6 per cent. The portfolio achieved the same
income expansion of 3.8 per cent for 12 months. The logistic portfolio gives a total return of
approximately 10.8 per cent with an occupancy level of 95.3 per cent and 7.9 years average
lease. In risk management, the board has established a committee to manage both financial risk
management and non-financial risk management. The group have leveraged its wide real estate
experience in the Australian property market delivering strong returns through asset development
and investment. Despite these drawbacks in the property market, the Sydney economy is strong
as much as Sydney rental yields are low in the country.

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Acknowledgement
I would like to express my appreciation to my professor who has the attitude and substance of a
genius. He has continually and convincingly delivered a spirit of adventure in regard to this
research and an excitement with regard to teaching. Without his continuous help and guidance,
this paper could not be possible. I also thank my classmates who supported me morally in the
completion of this paper. I also take this chance to thank the University for giving me the
necessary facility and financial support.

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Table of content
The Influence of the GPT Group On the Australian Property Market...................................7
Introduction....................................................................................................................................7
Literature Review..........................................................................................................................8
The GPT (General Property Trust)..............................................................................................8
Methodology.................................................................................................................................12
Results and Discussion................................................................................................................12
Sector Diversity..........................................................................................................................12
Office sector...........................................................................................................................13
Logistics Sector......................................................................................................................13
Geographic Diversity.............................................................................................................14
Debt Diversity........................................................................................................................14
Risk Management...................................................................................................................15
Financial Risk Management...................................................................................................15
Non Financial Risk Management...........................................................................................15
Performance and Outlook.......................................................................................................16
GPT Wholesale Office Fund......................................................................................................16
Portfolio Overview.................................................................................................................16
Portfolio Diversification.........................................................................................................17
Geographic Diversity.............................................................................................................17
Risk Management......................................................................................................................17
Financial Risk Management...................................................................................................18
Interest Rate Risk...................................................................................................................18
Liquidity Risk.........................................................................................................................18
Performance and Outlook.......................................................................................................18
....................................................................................................................................................19
Gearing and Net Tangible Assets...........................................................................................19
Property implication...................................................................................................................19
Conclusion....................................................................................................................................20
List of References.........................................................................................................................21

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The Influence of the GPT Group on the Australian Property Market
Introduction

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Real estate investment is well known than any other time as a result of the ongoing boom
in the Australian property market. There exist indirect and direct approaches to invest into the
Australian property market. This portfolio has basically focused on two investment vehicles, one
being A-REITs (Australian Real Estate Investment Trusts) and the other an unlisted property
Fund. As per the ASX (Australian Securities Exchange), A-REITs are reserves given to financial
specialists to get to resources. The underlying advantage of A-REIT is that they offer access to
assets that singular investors will be unable to get. A-REITs help create wealth by giving
exposure to the estimation of asset values and the related capital development as well as rental
income. The property market has faced phenomenal difficulties over the previous years. For the
past months, the house cost has been falling and housing finance of new home deals have turned
out to be weaker than a year before (AFP 2016, p.32). As a result of property listings, the fall of
sales volume is believed to move higher making the normal property longer to sell. This is
making sellers to pull back on the grounds that the market has turned out to be more slender.
The GPT group has played a vital role in addressing some of the key factors affecting the
Australian property market. The group has a strong capital position that enables it to fund some
future commitments. Similarly, the group has helped investors in the property market to benefit
from the price of securities trading (ABS 2015, p. 12 and Schlesinger 2015, p. 24). As a result,
the group has enabled investors to sell their existing GPT securities, re-invest at a lower cost by
taking advantage of the group offer (Soos 2012, p. 47). The GPT group has also eliminated the
hedging positions that have been complicating its financial structure and limiting transparency to
the market through developing of the simple balance sheet and establishing a clear financial
position.