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Australian Property Stocks Decline on Centro
Real estate news By Emma O'Brien
January 3, 2008 01:31 EST
Australian property trusts slid the most in almost three weeks on the country's stock exchange as investors shunned the shares because of concern that access to credit may suffer as retail spending in the U.S. wanes. The S&P/ASX 200 Property Trust Index fell 2.9 percent to its lowest since the middle of December and has lost 11 percent since Centro Properties Group, the owner of 700 U.S. shopping malls, said it may have to sell assets to pay debt. Centro's announcement shaved A$6.21 billion ($5.5 billion) off its market value over a two-day period.
Australian property trusts endured their first annual decline in seven years in 2007 as rising defaults in mortgages issued to high-risk borrowers in the U.S. spurred the biggest housing slump in 16 years, crimping the amount of credit available worldwide and subduing consumer demand. Seventeen of the sub-index's 20 members fell today, with Westfield Group and Goodman Group the worst performers. ``There's obviously concern about the sector following the fallout from Centro,'' said Andrew Parsons, who manages A$2.2 billion in property stocks at Resolution Capital Ltd. in Sydney.
Westfield, which owns 59 malls in the U.S. and is the sub- index's largest member, slipped 4 percent to A$20.15, its biggest one-day decline since Centro's statement. Stockland, Australia's biggest housing developer, lost 0.6 percent to A$8.35. Goodman, the country's largest industrial real estate investment trust, fell 5.2 percent to A$4.58, the largest drop also since Dec. 17.
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