'Property for income' key to APN's growing success

In a heady marketplace with large amounts of liquidity and transactional activity, leading specialist real estate investment manager APN Property Group's "sustainable income" approach to investing remains well-placed to bring investors excellent returns from commercial property. 

"Since the mid-1990s, APN has been investing in property, which delivers reliable and high income levels with modest amounts of debt," says Tim Slattery, executive director. "This 'property-for-income' philosophy has served us and our investors well. It is very much a part of our property investing and risk management DNA."

Listed on the Australian Securities Exchange and counting Macquarie Bank among its shareholders, APN has more than A$2.2 billion (HK$12.6 billion) in funds under management. About 50 per cent is invested in real estate investment trusts (reits), including the APN AREIT Fund, a flagship fund with annual returns averaging 17.83 

per cent since 2009 and a current income yield of 6.5 per cent paid monthly. APN's health care division manages about A$390 million through the Generation Healthcare REIT, while its industrial and business parks division oversees Industria REIT. Offering investors a yield of approximately 8 per cent with conservative gearing of around 35 per cent, Industria REIT is worth about A$400 million. More than A$200 million is invested in unlisted direct property funds which range from more core investments through to opportunistic development funds, with recent transactions generating returns to investors as high as 60 per cent. 

"We are dedicated to commercial property and offer investors market-leading expertise in the areas in which we operate," Slattery says. 

"However, just as importantly, over a long period of time, we've developed trusted relationships with our investors."