Resolution Capital’s property investment boss Andrew Parsons has insisted high-quality real estate remains a superb bet for investors and dismissed passive investment funds as a false economy.
The 30-year property investment veteran pointed to history to dismiss concerns rate hikes will hurt property capitalisation rates and valuations, as the sector recovers from COVID-19.Mr Parsons said property also faced a challenged outlookat what was then the Sydney Stock Exchange during the 1987 crash, but still delivered excellent returns for long-term investors.
Mr Parsons said the fund holds superior REITs, with strong balance sheets, capable management, and potential to sustainably grow income streams. Distributions are paid quarterly and the annual management fee is 0.8 per cent.Mr Parsons said he isn’t worried about the rise of passive index or theme-tracking investment funds and the cheaper fees they offer.
“I’ve never been in a battle with management and had an index fund sitting on my shoulder, or me sitting next to them,” he said. “They do nothing for corporate governance, they can say they do, but they outsource it to advisors. They don’t care.