Asia-Pacific: Australia offers a glimpse of the future
The issuers and investors building nascent Reit markets from Hong Kong to London must pause occasionally to picture what these new markets might look like in the future. What sort of issuance, innovation, consolidation and retraction might they see in the years ahead? Australia could have some of the answers. Chris Wright reports.
The Australian listed property trust (LPT) market – LPTs are not, strictly speaking, Reits, although the differences are subtle – is one of the most sophisticated listed property markets in the world. Bankers say that as much as 80% of suitable property in Australia is already securitized. It presents a useful case study in how such a market evolves over time. "We believe there is a Reit lifecycle," says Simon Jones, co-head of real estate capital at Macquarie Bank.
The Australian LPT market kicked off in the 1980s with the sort of structure typical of later Reit markets.