Conversation with industry leader Melissa Kingham
HW Funds partner Harry New chats with Melissa Kingham, Haben Executive Director & Fund Manager and Property Funds Association (PFA) President, about what is behind the Haben success story, current market opportunities, how environmental, social and governance (ESG) elements are influencing investment decisions, and the PFA’s views on the main issues for the property funds industry.
HN: What is the Haben story?
MK: Haben was established in 2009 by Harold Finger and Ben Finger.
Melissa Kingham
Having a long family history in property development and exposure to all property sectors, they made a conscious decision to be retail specialists, following a lengthy Land and Environment Court case to obtain approval for a new Woolworths supermarket. The time and cost involved in the court proceedings provided a deep understanding of Australia’s tight planning controls and the difficultly in replicating assets. This gave them real conviction to focus on the retail sector and invite capital partners as co-investors. Ben Finger is Managing Director, and Harold Finger, with his architecture and building background, guides our development outcomes. I joined as Executive Director and Fund Manager five years ago. With our passion for retail property (and opportunistic buying), the business and team has grown from four neighbourhood shopping centres to a portfolio of 12 centres, including sub-regional and regional centres along the eastern seaboard of Australia.
HN: Congratulations on the Haben Townsville Trust, managed by Haben Property Fund, being awarded the 2023 Unlisted Property Fund of the Year (for the second year in a row). What is at the heart of Haben’s success?
MK: Thank you! We are incredibly proud to have been awarded Unlisted Fund Manager of the Year for two consecutive years. What makes it even more special is we love what we do, and we are passionate about the retail sector and creating opportunities for income growth and higher capital value. At the heart of our success, and what sets us apart, is our highly experienced team of retail property specialists, together with our fully integrated funds and asset management service model. With over $2 billion assets under management, we have a great team of 100+ property experts that provide the full suite of asset and financial management, development, marketing, leasing, and tenancy design and delivery services. This business model ensures all stakeholders, including tenants, customers, and investors benefit from focused decision making in real time and with full understanding and control.
HN: What sectors do you believe present the best opportunity for the investment funds industry in the current market?
MK: Haben is focused on the retail property sector exclusively. Many fund managers are currently considering investment in the retail sector for the first time, post its performance during the pandemic, and its relative pricing compared with the other major sectors of office and industrial. There are sub-sectors within the retail sector that we consider have the best opportunity for both income and capital return. Retail property, with a higher concentration of food, services, and everyday-needs tenancies, which sit on larger land holdings, and provide opportunities for repositioning and development, is where we see the best opportunity in this market. These properties offer relatively resilient income streams, the opportunity for town-centre-style mixed-use development, and the potential to deliver well located housing to support community needs and strengthen local economies.
HN: How are ESG elements influencing your investment decisions?
MK: ESG elements are considered in every investment decision for new acquisitions and play a major role in our asset management strategies. With the investment industry increasing their focus on aligning capital with achieving sustainable outcomes, Haben too is focused on responsible investment on behalf of our investors and within our shopping centre communities.
Many of our assets are well advanced in terms of sustainability, with positive National Australian Built Environment Rating System ratings, solar panels, smart metering, and electric vehicle car charging. This year, we developed our first Environmental, Social and Governance strategy, with a broader focus on leadership, diversity, community, and industry engagement and corporate governance. As we go forward, improving environmental and social outcomes will continue to influence investment decisions and the growth of the business.
HN: As president of the PFA, what do you see as the main issues currently facing the unlisted property funds industry?
MK: The main economic issues facing the unlisted property funds industry are also impacting the broader property sector, including rising interest rates impacting returns, bond yields, and softening capitalisation rates reducing valuations and the evolution of the workplace and the work-from-home phenomenon.
Additionally, government policy amendments, taxation changes at both a Commonwealth and State level, and the potential impacts from the outcome of the Commonwealth Treasury Managed Investment Scheme (MIS) Review, are significant current issues for the industry. The PFA Issues and Regulatory Committee chaired by you prepared a comprehensive submission in response to the MIS Review Consultation Paper. The PFA is particularly concerned about changes to the wholesale investor test restricting investor choice, business viability of the smaller licensed wholesale Australian financial services licence holders, and the future of core plus investment opportunities. The industry has proven to be an attractive investment option for many self-managed super funds and wholesale investors with unlisted property funds having a long history of outperforming other sectors. The PFA is actively engaging with government to ensure the voices of our members, investors, and advisors are heard in relation to these current issues.