11 Jun 2013

Listed property strong, but caution advised

7:13 pm on 11 June 2013

The listed property sector has enjoyed a strong run so far this year until pulling back a little in the last week, but an analyst is warning investors to be a little cautious.

The property sector rose 1.1% in May, its fifth consecutive monthly rise, while the broader Top 50 Index fell 2.2% in the month.

Forsyth Barr analyst Jeremy Simpson said all the property companies within the sector have conservatively managed balance sheets, pay very attractive dividends and are pretty low-risk investments.

But the sector has been trading at its biggest premium ever to net asset backing and the small pullback in prices should remind investors the stocks are still equities and market prices can be volatile, he says.

However, Mr Simpson said the underlying fundamentals of New Zealand's listed property stocks remain strong.