28/07/2016: Should you buy the Propertylink IPO?

28/07/2016: Should you buy the Propertylink IPO?

Scott Schuberg:

Keri and Peter from New South Wales both have a question on Property link IPO. They've got an offer to take up shares.

 

Shannon Rivkin:

A couple of mixed results on some of the IPOs recently, so I'm not going to necessarily say, "Do or don't," because of the current IPO market. There's demand for good ones, and some of the bad ones have been really, really hit hard. Property Link looks a high-quality business and I think demand will probably be strong. If I have any real concern, and it's certainly not a big one, is this is ... Basically what it is, is a property trust stapled together with a management business. This is a little bit of an old-fashioned style of business. You used to see all of these properties funds and infrastructure funds like Sydney airports all internally managed once upon a time. With the GFC and all that sort of stuff, that trend is changing now to usually externally managed.

The reason Property Link I think wished to do it is because it's such a high growing part of their business that they do want to include it. The value of the management business is about $200 million they say and the property fund about $700 million. It's significant. I think if they can grow it aggressively, there's a good reason to include it, but there is always issues of conflicts and all that stuff and different growth outlooks. That's my one concern, which may suggest it. It may not perform as well as maybe some of the other property trusts, but it's a high-quality name. They've got a good track record of performance. The management business, as I said, looks exciting. I can't see why you'd be nervous about taking shares. Whether there's a huge stag on day one, hard to say. It looks like it could be good over the long term.

 

 

This video contains general advice only

comments powered by Disqus

DISCLAIMER: Rivkin aims to provide clear and simple information to those visiting our website. If any part of this disclaimer does not make sense, please phone Rivkin and ask to speak with a member of our Dealing and Relationship Management Team. Rivkin provides general advice and dealing services on securities, derivatives and superannuation (SMSF). Rivkin also provide SMSF administration and accounting services. Rivkin does not provide advice that takes into account your, or anybody else's, investment objectives, financial situation or needs. We strongly suggest that you consult an independent, licenced financial advisor before acting upon any information contained on this website. Investing in and trading securities (such as shares listed on the ASX) and/or derivatives (such as Contracts for Difference or 'CFDs') carry financial risks. CFDs carry with them various additional risks that differ from more simple securities such as fully-paid company shares. Some of these risks include not owning the underlying instrument from which a price is being derived, settling trades 'over the counter' with a financial institution rather than on a stock exchange, and using leverage to gain access to trades that may have a higher face value than your initial deposit. This risk of leverage means that it is possible to lose more than your initial investment. Our aim is to create more life choices for our clients, which means improving the wealth of clients throughout many market cycles by nurturing a relationship spanning many years. If you are not comfortable with your understanding of the risks involved before using a Rivkin product and service, please contact our office to seek further information or a Product Disclosure Statement, or make an appointment to sit with one of our friendly financial experts. It is in our interest for your Rivkin experience to be a rewarding and comfortable one. Rivkin is a trading name of Rivkin Securities ABN 87123290602, which holds Australian Financial Services Licence No. 332 802.