Individual investors will be able to buy as much as $100 million of Stockland stock at $3.88. At 1328 AEST the property company’s shares were trading down 14 cents, or 3.5 per cent, at $3.84. A Stockland spokesman told Markets Spectator the company has not decided when the share sale to individual investors will commence and end.

UBS sold $400 million of Stockland stock in two and-a-half hours yesterday at $3.88 a share, a 2.5 per cent discount to the stock’s closing price May 21 of $3.98.

Stockland uses a variety of investment banks for advice and capital raising. UBS had been hired to advise on the future strategy of the company, along with other investment banks. But Stockland's retention of UBS to solely manage the $400 million stock sale to onshore and offshore fund managers reinforces the Swiss investment bank’s position as the leading equity capital markets franchise in Australia. UBS last year managed Stockland’s US private bond sale, a buy back and a capital raising in 2008.

Stockland is using the proceeds from its latest share sale to finance about half a dozen shopping mall redevelopments throughout Australia in the next two years. Such redevelopments will cost an estimated $1.5 billion. In the next decade Stockland plans about 17 similar redevelopments.  

Mark Steinert, Stockland’s chief executive, forecasts yields of 7 to 8 per cent as a result of the redevelopments slated for the next two years. Internal rates of return will be 13.8 per cent upon completion of the redevelopments, he says in an ASX statement today.

Stockland’s shares have gained 8.8 per cent in the year to date compared with the 11 per cent gain in the S&P/ASX 200 Index. The index at 1328 AEST was down 19.857 points, or 0.4 per cent, to 5160.20. 

Westfield Group is taking steps to sell seven of the malls it owns in the United States to US investment firm Starwood Capital Group for more than $US1 billion, according to The Wall Street Journal.

Such a move, which remains in negotiations and not yet in final stages, would come as the latest in an effort to downsize and sell non-core malls that has seen Westfield offload about $15 billion worth of shopping mall stakes since 2010.

A deal with Starwood would also come as a deal between two sides familiar with one another. Westfield sold majority stakes in seven other US properties to Starwood in 2012 for over $US1 billion.

Recently, Goldman Sachs estimated that Westfield intends to sell $US1.2 billion worth of non-core assets.

“As net operating income growth picks up in the US, and as funding costs across the Pacific remain very low, the prospects of getting close to book are improving,” Goldman Sachs analyst Rob Stanton wrote.

In a separate report, The Australian Financial Review added that JPMorgan estimates that Westfield could also reduce its portfolio of malls in Australia and New Zealand to 25 per cent in a move that could net about $5 billion.

Adelaide Brighton shares have fallen as much as 4.3 per cent today after the building materials company warned of weak demand prompting its stock to be downgraded by Citigroup.

At 1:17pm AEST Adelaide Brighton had dropped 13 cents, or 3.8 per cent, to $3.33 after falling as low as $3.31.

At its annual general meeting yesterday, the world’s ninth biggest lime producer warned of “weak demand in the building and construction sector”, particularly in the eastern states Queensland and Victoria. It forecast cement and clinker sales to be lower in 2013 compared with 2012 with energy costs to increase.

Citigroup analyst Ross Barrows downgraded the stock to 'neutral' from 'buy'. Barrows’ target price for the stock is $3.67. But he has lowered his 2013 net profit forecast by 1 per cent, to $152.5 million.

Adelaide Brighton has its own clinker and cement plants. It also imports blast furnace slag as well as clinker and cement.

AAP

Sales of new United States homes rose in April to the second highest level since the summer of 2008 while the median price for a new home hit a record high, in further signs housing is recovering.

The Commerce Department said on Thursday new-home sales rose to a seasonally adjusted annual rate of 454,000 in April, up 2.3 per cent from March and just slightly below January's 458,000.

Both January and April had the fastest sales rates since July 2008.

The median price of a US home sold in April was $US271,600 ($A281,713.52), the highest level on government records going back to 1993.

The April price was 8.3 per cent higher than in March and 13.1 per cent higher than a year ago.

Steady job creation and near-record-low mortgage rates are spurring more Americans to buy homes.

Cromwell Property Group has sold $250 million of shares overnight to fund the purchase of seven office buildings from the NSW government, three in central Sydney and four outside the state capital, a person familiar with the matter said.

The share sale was fully underwritten by Cromwell’s investment banks, Bank of America and RBS Morgans, said the person who spoke on condition of anonymity as the success of the share sale had not been disclosed to the ASX.

The stock was sold at $1 a share, a 3.8 per cent discount to May 16 to May 22 total five-day volume divided by the total five-day value of securities sold on the ASX.

About two thirds of the stock was purchased by fund managers, said the source. Cromwell is expected to utilise $200 million of a $260 million three-year debt facility to help fund the purchase of the new property, according to an ASX document.

Cromwell says the value of its property investment portfolio will now be $2.3 billion. The new property the company is purchasing has an average yield of 9 per cent. The average value of the portfolio is $4690 per square metre. The Sydney buildings Cromwell has agreed to buy include Symantec House on Darling Harbour, the McKell Building on Rawson Place and Blight House on the street of the same name.

The company also owns the Qantas headquarters building, HQ North Tower in Brisbane and 321 Exhibition Street in Melbourne. 

If the New South Wales (NSW) government rejects Crown Ltd's bid to build a luxury hotel and casino in Sydney, the James Packer-owned gaming company may set its sights on challenging rival Echo Entertainment Group Ltd in Brisbane, according to The Australian Financial Review.

The state government is expected to rule on Crown's Sydney development proposal in June, and will also consider an application from Echo to extend its monopoly casino licence.

Mr Packer has proposed building a hotel and casino at the Barangaroo precinct on the edge of Sydney's CBD.

If it loses out on the Sydney development plans, which Mr Packer has called a once-in-a-lifetime opportunity, Crown may take on Echo in Brisbane, where Echo has proposed a new $1 billion dollar casino as part of its expansion plans, the AFR added.

The speculation comes as Mr Packer this past week sold his 10 per cent stake in Echo, sending Echo's shares to an all-time closing low of $3.03 on Friday.

Mr Packer said the move was intended to eliminate any speculation that his stake in Echo could influence his Barangaroo plans.

Crown had earlier this month won a bid to more than double his stake in Echo to 23 per cent.

House prices are falling again. If these falls are the start of a new trend lower rather than just a bit of a blip, it could be a very unpleasant signal that will require a policy reaction from the Reserve Bank.

According to data compiled by RPData, house prices have fallen 1.5 per cent in less than two months since the end of March to take a chunk out of the 2.6 per cent rise that was recorded in the first three months of 2013. House price are up just 1.2 per cent in net terms since the start of the year.

Since early 2011, for every few months there has been a bit of an increase, the next few months have shown a reverse and so on. That said, house prices are now approximately 5 per cent down from the peak around two years ago to register one of the longest periods of flat to falling house prices.

The recent dip is surprising given the extremely favourable housing affordability at present with low interest rates and rising wages helping to support housing demand. Falling prices are of course the other component of improved affordability.

While it is not clear what is behind the recent house price dip, in the last few months there has been a slide in consumer sentiment which might be seeing potential buyers hold off entering the market. Perhaps more fundamentally, the updrift in the unemployment rate over the past year or so has impacted on consumers’ willingness and ability to bid prices higher. The unemployment rate was around 5 per cent in the middle of 2012 and it is now around 5.5 per cent.

For the central bank, there is nothing yet in lower house prices that would see it losing sleep. But it knows only too well from the experience in the US, the UK, Ireland, Spain and elsewhere that a house price collapse is economic poison and should be avoided if the local banks are to remain solvent and keep the real economy growing.

Indeed, if it were not for the collapse in house prices in those countries, what ended up as the most severe economic crisis since the 1930s Great Depression may have only been a slow-down or mild recession.

The Australian housing market is also fundamentally different from the likes of the US, Ireland and Spain, where the house price bubbles were accompanied by a housing construction boom. If anything, housing construction in Australia is in the doldrums, with new construction bouncing along at very low levels.

Perversely, perhaps, this weakness in new housing construction is good news for now as it means there is little risk of a glut of property coming on to the market should there be a more worrying house price fall in the months ahead.

Obviously, the Reserve Bank does not target house prices as it has objective target changes in consumer prices. That said, any large and sustained falls in house prices matter from an inflation targeting perspective because a destruction of household wealth and severely damaged balance sheets for most banks in the event of a house price dive would unleash a deflationary bias into the local economy, much in the way it has in many overseas markets.

The chances of a sharp fall in house prices in Australia remains remote, not least because of the policy actions already from the Reserve Bank to cut interest rates but also because of the still extremely favourable demographics, especially strong population growth, that will continue to underpin housing demand for many years to come.

And of course, the central bank has plenty more it can do on interest rates. With the backdrop of around 90 per cent of mortgages having floating interest rates – that is, they move more or less in line with changes in official interest rates – signs of a troubling house price fall would inevitably see the Reserve Bank cut interest rates again and again and again.

This is why the recent Reserve Bank policy bias to further cut interest rates will only be reinforced by the recent house price declines. If the price falls gain momentum, there could even be a scenario when the central bank drops the cash rate more than the futures market is currently pricing – say to around 2.0 per cent. In a worst case, official interest rates could be 1 point something per cent which I suspect would be enough to underpin house prices and fend off the nasty effects of a house price bust. 

AAP

Westfield Group Ltd is confident its shareholders will approve its remuneration report at its annual general meeting this week, despite a push from the Australian Shareholders' Association (ASA), The Australian Financial Review reports.

According to the newspaper, the ASA is pushing for a reduction in the amount paid to the group's executive team including joint chief executives Steven and Peter Lowy.

While the ASA said it had some minor shareholders' support, the vote will ultimately be decided Westfield's two largest shareholders after the Lowy family - funds manager BlackRock and Vanguard Investments Australia.

A Westfield spokesperson said the group was confident it had "the backing of the overwhelming majority of retail and institutional shareholders," the AFR reported.

GPT Group has pulled up stumps – it won’t be doing a deal with Australand Property Group. Where to now for Australand and major shareholder CapitaLand? Sundance Resources had some better news yesterday and the share price responded. Meanwhile, KordaMentha is in some deals news in relation to Becton Property Group and Gunns Limited, and Peet makes preparations to assert itself over developer CIC Australia.

Australand Property Group, GPT Group

Australand Property Group shares are likely to take a spill this morning after its only declared suitor pulled out just minutes after the market closed.

GPT chief executive Michael Cameron appears to have made a sharp U-turn with the property group, declaring that it doesn’t need to purchase Australand’s commercial and industrial businesses. Less than a month ago Cameron said GPT "remained committed to submitting a deal".

“GPT has maintained a disciplined approach and has consistently advised the market that it does not need to proceed with the transaction to achieve its strategic goals,” said GPT in a statement to the market at 1606 AEST yesterday.

Just where that leaves Australand and its Singaporean majority shareholder CapitaLand standing is hard to tell. The Australian reports that sources believe the company is still a takeover target, however The Australian Financial Review understands that Blackstone Group has also pulled out of the process.

If there isn’t sufficient appetite for a stake sale and the bids aren’t large enough for a full sale, CapitaLand could sell down its stake.

Given that CapitaLand owns 58 per cent of Australand, it’s difficult to see the Singaporean investors making much of a dent in that stake swiftly.

Royal Dutch Shell is battling the same mentality with its stake in Woodside Petroleum. If the market expects you to offload a lot of shares, it’ll take away any chance of a premium.

There’s also the fact that property investors have filled $1 billion in raisings within the last month between Stockland Group, Cromwell Property Group and Mirvac Group.

Sundance Resources

A better day was had at Sundance Resources that ended with the stock up almost 24 per cent, admittedly off a very low base.

Sundance chairman George Jones told shareholders that interest in the company’s Mbalam iron ore project in West Africa remains, with “numerous groups” expressing interest to become involved in some capacity.

“These groups come from a range of countries and have widely diversified interests in areas such as resource projects, infrastructure provision and steelmaking,” said Jones.

“They have also expressed a range of views about how it would be possible to structure transactions which bring them into this project.

“These include the potential for some groups to provide port and rail solutions, through to direct investment in the project.”

As you can see, this is a far cry from the $1.3 billion deal from China’s Sichuan Hanlong Mining that Sundance spent almost two years dealing with before the takeover-that-never-was finally came to an end early last month.

Sundance’s market capitalisation is still dwindling at $303.6 million despite yesterday’s surge, but it’s heartening to see the company hasn’t been left bereft of options after the Hanlong debacle.

“It is well worthy of note that strategic investors continue to place significant value on West African iron ore projects,” said Jones, adding that Mbalam would enjoy some of the lowest costs in the global iron ore industry.

The same can’t be said for much of the projects under construction in this country.

Mariner Corporation, Becton Property Group

It looks like corporate raider Mariner Corporation has been given a serious talking to by the lending consortium of Becton Property Group over its board tilt.

According to a statement from Mariner, Goldman Sachs and Fortress Investment Group threatened to put Becton into administration if it continued to push for a shareholder meeting to get its chief Darren Olney-Fraser onto the Becton board.

“As this is not in the interests of Becton shareholders, or Mariner’s shareholders, Mariner has advised the Becton directors that, while it does not withdraw its 8 February 2013 requisition at this stage, it does not press the directors to call the meeting pending further advice from Mariner,” said the company.

Becton was put into receivership with KordaMentha two weeks after Mariner started pushing for Olner-Fraser to be elevated to the Becton board, where his chairman Don Christie already enjoys a seat.

But Goldman and Fortress are finally using the leverage they acquired over Mariner earlier this year.

Mariner might have 18 per cent of Becton, which is the subject of a recently extended loan, but Goldman and Fortress hold $246 million in debt facilities over Becton and preferred securities. These were picked up from Lloyd’s.

Gunns Limited, Macquarie Group, KordaMentha

Speaking of KordaMentha, the receiver will be unimpressed that a series of Gunns Limited growers' meetings will be held today to consider a Macquarie Group restructure proposal.

The Australian reports that KordaMentha sought an urgent injunction at the Victorian Supreme Court ahead of the meetings, which related to control of a portfolio of $500 million in nine Gunns managed investment schemes.

The last-minute effort did not persuade Judge Tony Pagone, however it was said that if Macquarie can secure majority support it will have to go before the courts to convince them the deal is “clean”.

Wrapping up

Ten Network boss Hamish McLennan reportedly says the broadcaster’s $500 million tilt to dethrone Nine Entertainment as Australia’s home of cricket is not financially reckless.

“Everything’s budgeted for,” said McLennan in an interview with The Australian Financial Review.

Some analysts have raised concerns that Ten has reached too far for the five-year cricket broadcast rights deal, with some reports coming out of Nine itself indicating the bid is high.

Elsewhere, Peet says it’s getting close to making appointments to the CIC Australia board after securing an 84.17 per cent stake in the residential developer.

And finally, Equity Trustees has extended its merger for fellow financial services player The Trust Company to the end of July, urging shareholders not to accept a rival proposal from giant Perpetual.

The Australian Competition and Consumer Commission is investigating the Perpetual deal.

AAP

United States home prices have posted the largest annual gain since 2006 in fresh evidence that the housing recovery is gaining traction, according to a closely watched report just released.

The S&P/Case-Shiller 20-city price index rose a non-seasonally adjusted 1.4 per cent in March from February, which had a modest 0.3 per cent gain.

On a 12-month basis, home prices were up 10.9 per cent in March, the largest increase since 2006, and all 20 cities in the index posted gains for the third month in a row.

"Other housing market data reported in recent weeks confirm these strong trends: housing starts and permits, sales of new homes and existing homes continue to trend higher," said David Blitzer, chairman of the Index Committee at S&P Dow Jones.

Blitzer noted other factors that suggested the housing recovery still had a way to go, including a number of homes still in foreclosure and homes being snapped up by investors to rent.

In the 20 largest US urban areas, the average home price was back to its late 2003 levels.

Fifteen of the 20 cities showed a monthly gain, up from 11 in February. San Francisco prices jumped the most, up 3.9 per cent.

The uneven economic growth performance in the US was tilted to the positive side overnight with confirmation that house prices continue to climb out of the mud that was the catalyst of the banking and economic crisis of 2008 to 2010. A jump in consumer sentiment also bodes well for household spending growth over the next few months. 

The US Case-Schiller index of house prices rose 10.2 per cent in the year to March, the fastest rate of increase in seven years. In isolation, this looks to be a strong rebound, but the context of these gains is that prices fell by around 35 per cent from the 2006 price peak. In other words, despite the gains over the past year, house prices are still around 28 per cent down from the peak. 

The recent rebound is, in the context of the US banking and economic performance, good news. It is an essential element helping consumers to rebuild their otherwise shattered balance sheets. As prices rise, there are fewer borrowers with negative equity in their houses and this helps to restore confidence and their ability to spend and importantly, borrow.

From the banking sector’s perspective, rising house prices now, after the carnage of the 2008 to 2011 period, are also a positive development given the massive overhang of bad debts, low quality borrowers and their inability to boost credit given the absence of credit worthy borrowers. These negatives for the economy are slowly but surely fading. When consumers have negative equity on their mortgages, for example, it exposes the banks to unavoidable losses and bad debts and undermines their ability to provide credit and hence there is a spiral into economic funk. 

This is why double-digit house price growth is good news.

The Federal Reserve and its Chairman, Ben Bernanke, will no doubt welcome the news for all of the reasons mentioned – it is another step along the road to a sustainable aggregate economic recovery.

Other US housing indicators have been similarly positive in recent months. Home builder confidence is at a six year high and while there was a dip in new housing starts in March, they are in a clear up trend to be over 13 per cent higher than a year earlier. There have also been three building companies list on the US stock exchanges so far in 2013, which are the first such listings since 2007.

Clearly something positive is brewing in the US housing market. Easy monetary policy is working to reflate the otherwise depressed housing market and with it, set the economy on a more sustainable growth path.

At the same time, the Conference Board measure of consumer sentiment continues to rise, with a move to 76.2 points in May from 69 in April to be at its highest level since February 2008.

This good news on housing and consumer sentiment saw a strong market reaction – stocks were up while perhaps more importantly, the 10 year government bond yield jumped to 2.16 per cent, a 13 month high.

The jump in bond yields happened despite the ongoing threat and actual action of quantitative easing from the Federal Reserve and marks quite a massive sell-off from the start of May, when 10 year yields were 1.62 per cent and from July 2012 when they hit an all-time low of 1.40 per cent. The rise in yields reflects a mix of higher inflation pressures and an element of risk with the markets now willing to fight the Fed and start to position for yet stronger economic growth.

While it is very early days and with QE still designed to drive yields lower, the backup in bond yields is a tentative sign of some normalisation in markets and is again encouraging to observe.

The US is growing at a solid, if not terrific pace. Further growth is needed before there can be any confidence that bad news will not raise its ugly head again and that there is a sustainable, stimulus free, growth momentum in place.

This could be a year or two or even three away, although sustained double-digit house price rises and further strength in consumer sentiment confirm that the economy will, one day, get back to an even keel.

By a staff reporter

Housing affordability improved again in the March quarter, driven by easing mortgage lending rates and subdued house price developments.

The Housing Industry Association of Australia-Commonwealth Bank of Australia housing affordability index increased 1.2 per cent in the three months to March 31 to a level of 69.7.

The index sits 12.8 per cent higher than it did a year ago.

However, HIA senior economist Shane Garrett warned the improvements to affordability in the update were not universal.

"Housing affordability across regional Australia deteriorated mildly in the March quarter this year, due largely to dwelling price increases which offset the effects of reduced lending rates," he said.

"Overall, the trend across the capital cities is one of continued improvement in affordability, with the capital city index increasing by two per cent in the March 2013 quarter.

"However the cities of Adelaide, Perth and Hobart each saw declines in affordability."

Mr Garrett said, some developments notwithstanding, the overall trend of improvement continued into 2013 and flagged further improvements over coming quarters as the latest RBA rate cut flowed through to households.

By a staff reporter

The value of houses across Australia’s capital cities fell in May on the back of lower consumer confidence, according to RP Data-Rismark.

The RP Data-Rismark index dropped for the second consecutive month, falling 1.2 per cent in May after edging 0.5 per cent lower in April.

These results followed a 2.8 per cent increase over the first quarter of this calendar year.

The worst performing capital city in the index was Melbourne, which fell 1.9 per cent for the month.

Perth’s housing market performed the strongest, growing 1.9 per cent.

GPT Group will set up a new office fund focusing on suburban assets, while an industrial property fund is also in the pipeline, The Australian Financial Review reports.

According to the newspaper, the property group has lodged files with the Australian Securities and Investments Commission (ASIC) to establish the new funds, which will complement its existing office and retail wholesale property assets.

“GPT has previously stated to the market its intention to grow its funds management business,” a company spokesperson said, according to the newspaper.

“It is early days in the process but we are looking at various opportunities to meet this target.”

The refocus comes after GPT Group last month withdrew its offer for Australand Property Group’s commercial portfolio, valued at $3 billion.

Suburban towers generally offer higher yields than similar assets in major central business districts, with the potential for higher investor returns, the AFR reports.

The remaking of Federation Centres and its shift towards a very different business model is continuing at a frenetic pace.

Federation, the former Centro Properties group, today announced an agreement to sell 50 per cent interests in six of its assets to Challenger for $602 million, with FDC remaining manager of the centres and retaining responsibility for their redevelopment.

The Challenger deal is the latest in a strong of similar “alliances” that FDC chief executive Steven Sewell has struck since being appointed early last year after FDC emerged from the wreckage of the extraordinarily complicated Centro Group, one of the largest, most protracted and most difficult reconstructions ever undertaken in this market.

Under Sewell FDC has now raised more than $1.6 billion by selling interests in its centres to investors like the Perron family in Western Australia, industry fund property specialist ISPT and Challenger.

The strategy is driven partly by necessity but also has a strategic and financial logic of its own.

FDC needed to raise capital without tapping its investors to reduce debt but more particularly to give it the capital to reinvest in a portfolio that had been starved of capital for the five years or so that Centro was in the hands of its bankers. There is considerable redevelopment potential within the portfolio.

Sewell also wanted to further simplify his structure. FDC inherited a $2.5 billion pool of assets that had been syndicated to investors and Sewell has made it clear he wants to reduce the size of that portfolio to negligible levels by either taking them onto his balance sheet or selling them.

He’d already shrunk the syndication business by about $1 billion before today. Four of the six assets involved in the Challenger deal are partly owned by FDC-managed syndicates. The target is to reduce the syndicated asset portfolio to a couple of hundred millions dollars.

The co-ownership strategy, however, isn’t driven just by a need for cash, although it will have helped reduce FDC’s gearing from about 35 per cent 18 months ago to about 22 per cent after the latest deal is completed, allowing FDC to reduce the size of its undrawn debt facilities and protecting its investment grade credit rating.

The strategy is similar to that being pursued aggressively by the Lowy family at Westfield as a way of both reducing risk and leveraging returns on capital.

While the sell-downs do reduce FDC’s exposures to the underlying assets it retains the management rights for the properties it is joint venturing, which generates an income stream, as well as development fees as the centres are redeveloped.

That leverages the return on the reduced about of capital employed while also providing the cash to fund FDC’s share of the redevelopment costs, which in turn enhances the value of the portfolio.

It also means that FDC can offer something to two classes of property investors – the investment funds and high net worth investors who want direct interests in retail property and the retail investors and smaller institutions who traditionally have gained their exposures to the income-generating securities through listed real estate investment trusts.

For the moment FDC is very focused on what it has within its existing portfolio and the redevelopment opportunities in front of it but, as the Lowys are demonstrating, the business model FDC is pursuing could be used in future to help finance an expansion of the portfolio by continuing to recycle capital through similar alliances with direct property investors.

By a staff reporter

Former Centro Properties Group, Federation Centres Ltd (FDC), will sell 50 per cent of its interests in a property portfolio of six assets to Challenger Ltd for $602 million.

In a statement, FDC said that it will continue to manage the centres and their redevelopment programs.

The portfolio of assets includes regional shopping centres at Bankstown and Roselands in New South Wales, and the convenience centres at Toormina and Lennox, in New South Wales, Sunshine in Victoria and Karratha in Western Australia.

Federation Centres managing director Steven Sewell said FDC would continue to provide all property-related services when Challenger acquired the FDC-managed Surfers Paradise Centre in Queensland.

“It is pleasing that we have now agreed to extend our alliance to also include co-ownership of a larger group of other centres," he said. 

“We look forward to working with Challenger at these quality shopping centre destinations to provide an engaging shopping experience for our consumers and enhanced returns for investors.

“Both FDC and Challenger share a common view of the potential for strategic and prudent investment to enhance these centres.”

The assets, owned by FDC and a number of Retail Direct Property syndicates, have a gross value of $1.2 billion.

GPT Property Group Ltd's managing director Michael Cameron has no regrets about the entity's failed $3 billion play for Australand Property Group Ltd's commercial and industrial business, The Australian Financial Review reports.

According to the newspaper, Mr Cameron said while the Australand acquisitions would have been a chance to accelerate the group's strategy, he belives GPT can do it organically.

"I think what we displayed in the last couple of weeks was enormous discipline," he said, according to the AFR.

" Our goal is to be the best performing property group, not the biggest."

GPT pulled its latest bid for Australand in late May, six months after Australand rebuffed the group's initial offer.

The S&P/ASX200 Real Estate Index has slid 11 per cent since May 21 as investors have taken profits on yield stocks such as real estate investment trusts.

Amanda Skelly at fund manager State Street Global Advisors says the sector is in a healthier position than it was prior to the collapse of Lehman Brothers in September 2008 that sparked the global financial crises.

“I don’t think the sector is in a bubble,” Skelly told Markets Spectator. “We think yield opportunities are still there”.

Yields in the AREIT sector are still at 4-6 per cent, she says. Net asset to debt ratios are on average 26 per cent for AREITs compared with 36 per cent pre the global financial crises, Skelly says. She says AREITs are a good investment for those with an investment horizon of five to seven years.

At 1141 AEST the S&P/ASX200 Real Estate Index was down 0.7 per cent to 1017.20. The S&P/ASX200 Index had declined 40.606, or 0.8 per cent, to 4794.60.