Prediction: more institutional investors will be looking at retirement next year

A close read of the media over the past few weeks indicates wholesale investors may soon be ready to look at the retirement village sector again after the horrific losses since 2008. Peter Costello gave an opinion piece in the Fairfax press two weeks ago pointing out that superannuation funds last year averaged just 0.61% return for members. This week’s super funds were gloomy about investing in bonds because forward estimates indicate bond values will drop with the “Nike swish” effect until 2016, defying the Reserve Bank efforts for a positive upward trend. Meanwhile the supply and demand fundamentals of retirement and property just look better, especially with a few bigger operators now reporting strong results after cleaning out their houses. An interesting example is the Canada Pension Plan Investment Board, which is a big investor in retirement in Canada and the US, which has been activly investing in Australian shopping centers over the past few months [a $1.4 billion joint venture with AMP Capital and Westfield]. The smart money is saying in 12 to 18 months value will return to the retirement sector.