Property – is it dead?

July 2008

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 Agenda

• LPTs have been smashed

• Outlook going ahead
• Worst case scenarios
• Global Property Securities outlook
• Direct property outlook
• Residential property outlook

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 Falls of 35 to 50% have been seen before…
US Equity REIT vs LPT price Indices

700
-34%
600
-33%
500
-28%
400
-53%
300 -48%
200

100 -17%
-35%
0
71 76 81 86 91 96 01 06

3 Aust LPTs US REITS farrelly’s

 Forecast methodology
Income = Dividends 8.0%
+ +
Growth Growth in Divs 3.5%
+
rate of change 3.6%
of yield
(8% to 5.6%)
= Total returns 15.1%pa
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 All property is not the same…

10 year Property Forecasts

July 2008
Base case Optimistic Pessimistic

Global Prop Sec 8.4%pa 10.4%pa 5.6%pa

Direct property 8.5%pa 10.9%pa 6.3%pa

Residential 6.5%pa 10.5%pa 1.5%pa

Property
Australian LPTs 14.9%pa Who cares? 12.0%pa

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 How the world has changed since last
year…
10 year Property Securities forecasts.
Sept 07 and July 08
Base case Optimistic Pessimistic

Australian LPTs 14.9% Who cares? 12.0%

Jun 08
Australian LPTs 4.8% 6.8% 2.9%
Sept 07
Global Prop Sec 8.4% 10.4%pa 5.6%pa
Jul 08
Global Prop Sec 3.4% 6.0% 1.3%
Sept 07

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 About farrelly’s Investment
Strategy
• Established 2002
• Client base includes over 100 dealer
groups
• Focus on asset allocation and
investment strategy for financial
planners
• tim.farrelly@farrelly.com.au
• Phone : 0416 237 341
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 Disclaimer.
This presentation has been prepared on the basis that it is only
for the exclusive use of the person for whom it was provided.
Although information is derived from sources considered and
believed to be reliable and accurate, farrelly’s, it’s employees,
consultants, advisers and officers are not liable for any opinion
expressed or for any error or omission that may have occurred
in this presentation. Any forecasts included are reasonably
believed to be reliable based on current information but due
to our inability to predict future events with certainty, they
cannot be guaranteed. This presentation is of a general nature
only and has been prepared without taking into account any
persons particular investment objectives, financial situation or
particular needs.

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