SA listed property returns beat cash and bonds but not equities

By Roy Cokayne Time of article published Feb 7, 2018

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JOHANNESBURG - Listed property returns outshone cash and South African bonds last year but failed to match the returns from South African equities.

The FTSE/JSE South African Listed Property Index (SAPY) achieved total returns of 17.2 percent last year to deliver double digit growth to investors for the second consecutive year after delivering returns of 10.2 percent in 2016.

Cash delivered returns of 7.52 percent, South African bonds 10.19 percent and South African equities 20.9 percent.
Research from Bridge Fund Managers shows that,

Within the overall listed property universe, South African real estate investment trusts (Reits) achieved a return of 13.5 percent last year, according to research by Bridge Fund Managers.
Picture: Denis Farrell / AP
This was also the second consecutive year of double digit returns by local Reits following the 14.7 percent return achieved in 2016. Izak Petersen, the chairman of the SA Reit Association, said yesterday (tues) the South African Reit sector continued its solid track record of strong positive performance for investors last year despite a very tough operating environment locally throughout the year.

One of the dominant trends to emerge in the sector last year was the internationalisation of South Africa’s listed Riets, with international exposure increasing significantly as the sector continued to pursue growth in other investment markets around the world.

About 40 percent of the listed property sector’s assets on the Johannesburg Stock Exchange were now offshore. Petersen believed this trend seemed likely to continue this year because local market conditions remained difficult.

The offshore expansion of the South African Reit sector began more than a decade ago and the sector now has exposure to more than 25 countries, largely in Eastern and Western Europe.

The SA Reit Association hosts its third biennial gathering, the SA REIT Conference 2018, at the Sandton Convention Centre in Johannesburg on March 15.
Robin Lockhart-Ross, the managing executive of property finance at Nedbank CIB, the sponsor of the event, said Nedbank’s involvement in the conference dated back to its inception following the introduction of the Reit structure in South Africa.

“As a sponsor of the association and financier to many of its members, we are fully supportive of the objectives of the association to advance good governance, reporting and transformation in the industry.

“These initiatives have enabled the internationalisation of the South African listed property sector, which has been nothing short of spectacular.

"This is evidenced in the number of pure play internationally listed companies that now account for close to 40 percent of the entire market capitalisation of the listed sector,” he said.

Jaap Tonckens, the chief financial officer of Paris-based Unibail-Rodamco, will be the headline speaker at the conference.

Tonckens was responsible for overseeing the acquisition by Unibail-Rodamco of Westfield Corporation in Australia for $16bn, which was set to make the Unibail-Rodamco the world’s biggest international retail property owner.


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