Schroders: Aussie retailers and property trusts at risk

Schroders: Aussie retailers and property trusts at risk. Andrew Fleming, Deputy Head of Australian Equities at Schroders says Australian retailers and property trusts are massively over-investing in physical shopping centres and under-investing in online channels when compared to their US counterparts. Fleming says this over-investment increases the operating leverage pretty materially for both the retailer and for the property trusts that tend to own most of this space. Australian retailers are effectively betting that the US online experience isn't replicated here. To us they're big risks. We think it's likely that ultimately that US experience in terms of online distribution is replicated here and that secondly the risk that they're stranded assets in shopping centres is much higher than perhaps is countenanced with current valuations. We think this is a clear and present danger facing that sector.

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