Question of the Week

Property options and what to do with Telstra

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Question: I’m looking for some advice on a listed property trust and wondering if you could shortlist a couple for me. Listed versus unlisted – which do you prefer and why?

Answer (By Paul Rickard): I am not a huge fan of listed property trusts at the moment – think in the main they got quite expensive and many are now trading at premium to Net Tangible Assets. James Dunn has written extensively in Monday’s Switzer Super Report about the unlisted and listed markets. In the listed market, he likes some of the niche operators, including:

Cromwell Property Group (CNW)
Bunnings Warehouse Property Trust (BWP)
Generation Healthcare (GHC)
APDC Group (AJD)

Question 2: I have 20,000 Telstra in my SMSF for which I paid $3.18. I need dividends. Do I sell part, sell all or keep all. As I watch the price coming down I question what I should do?

Answer 2 (By Paul Rickard): I am not sure what you mean by the “price coming down”. Sure, it has come down from its high of $5.23 – however at around $5.00, it is still up 25% on its price at the start of the year.

Telstra will pay a 28c fully-franked dividend next year (could be as high as 29c or 30c). Assuming this is only 28c, this is a yield of 5.6%, which grosses up to 8.0% if you are in pension – or 6.8% if you are in accumulation.

If you need the income, keep all.

Important: This content has been prepared without taking account of the objectives, financial situation or needs of any particular individual. It does not constitute formal advice. Consider the appropriateness of the information in regards to your circumstances.

Also in the Switzer Super Report:

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