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Currency Risk Management Practices by Australian Listed Property Trusts

Author/s: Graeme Newell, Ian MacIntosh

Date Published: 1/01/2007

Published in: Volume 13 - 2007 Issue 2 (pages 213 - 233)

Abstract

Many Australian listed property trusts (LPTs) have significant levels of international property in their portfolios and have adopted a range of currency risk management strategies to mitigate some of this LPT risk due to their international property exposure. A survey of LPTs with international property is used to assess the characteristics of their international property portfolios and their currency risk management strategies for both capital and income risk management. In addition to the natural hedging strategies, increased use is being made of hedging procedures for both capital and income risk management. Different risk management strategies were also evident, depending on whether the LPT had a 100% international property portfolio or a merged domestic/international property portfolio.

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Keywords

Capital Component - Currency Risk Management - Hedging Strategies - Income Component - International Property - Listed Property Trusts

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