The BlackWall Property Trust (ASX: BWR), with a market cap of $92 million, gained 5% on Tuesday's trade to close at $1.38.
The Trust holds a portfolio of industrial, retail and commercial property in Australia including a property occupied by BlueScope Steel Limited (ASX: BSL) in Coolum, the Canberra Eye Hospital and the Chancellor Homemaker Centre.
But some are losing faith in Australia's property market and BlackWall's ability to provide solid returns.
Recent reports indicate that Sydney's property bubble is on the brink of bursting and Australia's astonishing increase in house prices over the past 50 years is finally coming to an end.
In Western Australia, first homebuyers are reportedly celebrating the re-emergence of affordable properties as prices in Perth and other parts of the state have dropped on the back of the mining downturn. It's a similar story in Darwin.
Dr Shane Oliver, an economist for AMP Limited (ASX: AMP), said talk of a property crash is likely to ramp up again with signs that the Sydney and Melbourne property markets are cooling.
"We continue to expect a 5%-10% downswing in Sydney and Melbourne property prices but a crash is unlikely and other capital cities will perform better," Dr Oliver said.
"It remains a time for property investors to exercise caution and focus on laggard or higher-yielding markets."
One investor that seems to be exercising caution is the Aims Property Securities Fund (ASX: APW).
Aims Property Securities Fund, with a market cap of $72 million, announced on Tuesday it had disposed of 5,847,669 units in BlackWall, which were sold for $1.30.
The Fund provided the following reasons for offloading the Blackwall stock:
- The funds from sale are better utilised in other opportunities, which may lead to a more profitable outcome for unitholders;
- National and global effects on the real-estate market may have a downward effect on the value of these holdings in the short to medium future; and
- In accordance with APW's investment guidelines, there must be acceptable liquidity if the investment is listed and where possible, the Fund is to hold material or majority interests in its unlisted investments, so as to enable influence over the strategy and direction of the investment. This opportunity to exit our holdings in BWR may not arise in the future.
Perhaps it's time to move on from real estate.
