Steve Burton, portfolio manager of ING’s International Real Estate Fund, talked about his top stock picks with Barron’s on 6/9/08.  He likes companies that he considers controlling “fortress malls” (top-class shopping centers with strong anchors) as protection against a challenging economy.  In 2007, though his fund was barely up, it was on average almost 16% better than other international real estate funds, and he finished in the top 2% of all real estate funds, so he is worth listening to.  40% of his fund is invested in Asia where growth is stronger.  Here are some of his points:

1. a demand/supply relationship in commercial real estate remains stable in this macroeconomic environment.

2. he likes dominant mall companies not only in the U.S. but elsewhere

3. He has reduced investments in Manhattan offices despite strong fundamentals; taking profits off the table.

4. He continues to believe that the U.S. will either enter recession or get very close to it and the real GDP growth for 2008 will be in the 1% range

5. Even though rents may come down in some markets, the rates are higher than existing leases, so there still remains upside.

6. On an annualized basis the dividend yield of global property stocks is in the 4% range.

7. He expects a positive total return by the end of the year during the second half. But he doesnt think the volatility that we have seen as of late is going away in the near future.

He is adding to his positions in :

1. Simon Property Group (SPG)

2. General Growth Properties (GGP)

He is reducing his positions in:

1. Vornado Realty Trust (VNO)

2. AMB Property (AMB)

3. Prologis (PLD)

Track Steve Burton’s stock picks at:

http://www.trackthepros.com/categories.php?category_id=990