Australian REITs look ready for acquisitions-CBRE

SYDNEY, June 10 (Reuters) - Australian property trusts are cashed up and ready to start a round of a consolidation in the sector by buying up distressed assets, U.S.-based property fund manager CBRE Global Real Estate Securities said on Wednesday.

Australian property trusts and companies have raised nearly A$9 billion ($7.2 billion) of equity this year to bolster balance sheets against falling asset values and to pay off debt, but some of the proceeds will be also used to chase distressed assets, according to the CBRE fund manager.

"Some of the companies that have raised equity more recently have clearly delivered the message to the market that they are going to be in an acquisition mode in the not too distant future," co-chief investment officer Steve Carroll told a teleconference.

"The cycle will begin with a lot more single assets transactions, moving onto the portfolio and finally corporate transactions," he said.

CBRE GRES is a part of CB Richard Ellis Group (CBG.N), one of the world's largest commercial real estate services firms, and has $1.6 billion assets under management.

Australian property trusts have borrowed money heavily to deliver higher returns and expand into overseas markets, but many ran into trouble when the global credit crisis hit asset values and forced many lenders to call in loans.

Bigger players such as Westfield Group (WDC.AX) and Stockland Group (SGP.AX) that were less affected by the downturn have raised capital from the equity markets, putting them in a position to snap up any assets that come on the market.

Carroll added that listed property securities worldwide are attractive as their share prices are currently cheap and they have access to capital, something private real estate owners do not.

Carroll said his firm has participated in some of the recent capital raisings in Australia, the United States and the United Kingdom, as those offerings are deeply discounted and provide good investment opportunities. ($1=1.244 Australian Dollar) (Reporting by Eriko Amaha; Editing by Jonathan Standing)