The funds management group that previously bought out all of the former Centro Property Group's 600 US shopping malls and plazas, and currently holds $2.5 billion in Australian real estate, is on the lookout for even more investments here.
US-based Blackstone recently picked up seven Australian office buildings from GE Capital Real Estate for $300 million and the $360 million Greensborough Plaza shopping mall in Melbourne from Lend Lease (ASX: LLC). This interest in Australian property is from the company's view that the domestic market here is stable, and according to its chairman and CEO Stephen Schwarzman, is "set up in a very intelligent way" including a social pension system uncommon amongst developed world economies.
If it sees the domestic office and retail real estate market as a buy, which of these Australian-based companies could also be of the same opinion?
The $22.9 billion Westfield Group (ASX: WDC) sits at the top with its Westfield Retail Trust (ASX: WRT) owning and operating its Australian shopping mall portfolio. In its most recent annual report in 2012, net profit after tax (NPAT) was up 25% from $457 million to $572.6 million. It has three major shopping mall developments going on now in Brisbane, Sydney and Adelaide.
The Goodman Group (ASX: GMG) invests in and operates real estate globally, but derives about 41% of its revenue from Australia and New Zealand. It currently is developing a $350 million industrial park near in Brisbane, and is interested in buying the Sydney Corporate Park in Alexandria. It already controls about 90% of the south Sydney industrial property market.
It had a strong year in 2013 with $566.4 million in NPAT, up 76% from $320.7 million.
Residential, retail and office developer and owner Stockland (ASX: SGP) is looking to the recovering residential property market for signs that housing construction will pick up its pace, and has indicated that it expects to sell more than its previous guidance of 5,000 lots.
The number of housing deposits lodged were the most in any quarter for the past three years, and the Willowdale housing development in southwest Sydney, its largest ever New South Wales project, opened sales for the first three tranches of lots, and each were sold out in their first day of release.
It's 2013 revenue was down to its lowest in seven years, with NPAT down 26.8% from $676.1 million to $494.8 million.
GPT Group (ASX: GPT) recently gave guidance for 2014 that it expects to raise its funds under management from $7.2 billion to $17 billion, so it will be on the hunt for acquisitions to put those funds to use. It wants to focus more on total returns rather than per share earnings, so the emphasis is on growth that has strong passive income. Although it does development, existing real estate would satisfy that desire.
It had a stellar half year of earnings growth, up from $168.3 million to $257 million in 2013.
Foolish takeaway
The number of acquisitions and takeover offers in the real estate industry is showing that market is warming up. Those companies that didn't buy up properties when they were dead cold during the GFC are positioning themselves for the next leg up.
Having property stocks in your portfolio can add stability with their regular dividend income, and when the general economy turns up, property values and market demand also climb. These are the largest of the industry, but you should look over the whole industry to see where niche leaders are making headway and ample profits.
