Offshore property glow

A struggling economy is spurring South Africa’s largest real estate investor to buy the stocks of property companies that are expanding outside the continent’s most developed market. Returns in the FTSE/JSE South Africa Listed Property index might slow to 12 percent in 2015 after an “exceptional” 2014, according to Keillen Ndlovu, head of listed property funds at Stanlib Asset Management. The gauge rallied 19 percent last year, beating an advance of 7.6 percent in the benchmark FTSE/JSE Africa all share index and an 18 percent increase in the 385-member dollar-denominated S&P Global REIT index. “A lot of companies increased their offshore exposure in 2014, and benefited from a weaker rand, which helped boost their earnings,” Ndlovu, who helps oversee the equivalent of $1.7 billion in listed property assets, said last week. “The picture looks a lot better in the offshore space. Valuations look more compelling.” Stanlib’s picks include Hyprop Investments, which owns shopping malls in South Africa, Ghana and Zambia with plans to add centres in Nigeria and Kenya to “flavour their portfolio”, Ndlovu said. Growthpoint Properties, the largest Johannesburg-based real estate company, was also well-balanced with retail, office and industrial space and assets in Australia, Ndlovu said. Hyprop was “nicely positioned even in a market where property businesses led the number of initial public offerings in 2014, with eight of 23 share sales, after the Johannesburg Stock Exchange changed listing requirements to allow for Real Estate Investment Trusts”. – Bloomberg