Listed property sector still strong

New Zealand's listed property sector remained strong last month (October) and outperformed the NZX-50 which returned 3.3%, Forsyth Barr broker Haley Van Leeuwen said yesterday.

In the last 12 months, property was up a "spectacular" 22%, ahead of the 20.4% achieved by the NZX-50.

"The property sector continues to appeal to investors focused on income, given its defensive qualities and attractive gross yield of 8.1%."

All nine of the listed companies had a positive October, Mrs Van Leeuwen said.

The strongest performers were National Property Trust (up 7%), Precinct Properties (5.6%), Kiwi Income Property (5.4%) and Goodman Property (3.9%).

With all of the large listed companies performing well, the overall sector gross return in October was a strong 4%, she said.

National Property's gains were driven by a leasing improvement and the positive revaluation announced during the month.

The 2013 first-half reporting season was under way, with Augusta Capital confirming strong growth driven by its property syndication operation, she said.

The traditional listed property vehicles were expected to report more subdued results with relatively flat operating performance for most, and shorter earnings per share reflecting higher tax and increased units on issue.

A slowly recovering property market, plus an attractive dividend yield relative to other investments, continued to drive interest in the sector.

"The defensive quality of the sector's cash flows relative to the broader equity market also continues to appeal.

"However, returns over the next 12 months are likely to be more centred on dividends rather than capital gains."

Mrs Van Leeuwen's top picks were Argosy, DNZ Property and Augusta Capital.