File picture: James White

Johannesburg - South African listed property last year outperformed bonds, cash and equities for the seventh time in the past 11 years.

Figures released by Catalyst Fund Managers revealed listed property last year provided a return of 7.99 percent to investors to outstrip the 6.46 percent return from cash, 5.13 percent from equities and minus 3.93 percent from bonds. In 2014, the listed property sector delivered a return of 26.6 percent compared with returns of about 10 percent for equities and bonds, and 5.9 percent for cash.

Laurence Rapp, the chairman of the SA Reit Association, said yesterday that the domestic real estate investment trust (Reit) sector had last year continued its excellent track record of outperformance for investors despite a tough operating environment and the brutal turmoil that hit local markets last month.

Despite being the best-performing asset class last year, the returns of listed property were lower than in recent years after the sector, together with other asset classes, were knocked in December by the capital market response to the dismissal of Nhlanhla Nene as finance minister and the replacement of Nene’s successor David van Rooyen four days later by Pravin Gordhan.

The listed property sector lost 6.12 percent last month despite recovering some of its December losses following Gordhan’s appointment. Rapp said the limp local economy would put all sectors under pressure this year, but the sector was already ahead in its quest to find greater value for investors by entering new markets and sub-sectors.

“International and sectoral diversification has been a growing trend in the sector for some years now and certainly dominated strategies in 2015,” he said.

Rapp said this focus was likely to continue this year.

“Given the stagnant economy, weakened rand and further threats of a credit downgrade, the sector will work hard to sustain value in local markets, while also looking for offshore assets with more attractive fundamentals and rand hedge benefits.

“However, property is a long-term game, so Reits favour taking a corresponding long view when making investments. It is this approach that has sustained the sector’s performance in tough times,” he said.

BUSINESS REPORT