People wanting to invest in the listed property sector may have a hard time making sense of it because of a dearth of research, says property entrepreneur Niki Vontas.

There are too few property analysts and the quality of research is lacking as a result of high turnover in the profession, he says.

The quality of research on the listed sector in the early 1990s was of a high standard, but is inconsistent now because there is less in-depth knowledge of the physical property market, he says.

He believes property analysts need a great deal of knowledge of the physical property market and the listed sector. The current crop of property analysts is familiar with the listed sector, but not necessarily with directly held property, he says.

"If you don't understand the physical property market, you won't be able to understand the factors and forces that govern all these listed companies," he says.

Vontas says a listed property company's share price might be high and it may appear to be doing well. However, a closer look at the property held by the company can reveal a different picture.

"It may have leases expiring in the next 12 months in areas where there is a big oversupply of offices. You won't be able to rent out your offices, and your rental income will go down and will affect your profit and cash flow," Vontas says.

He believes all listed property research should be independent. Property analysts employed by financial institutions face the conflict between pure analysis and the obligation to contribute to their institutions' revenue, he says.

Angelique de Rauville, MD of listed asset management company Provest, which is part of Investec Bank and does monthly research on the listed property sector, says that the physical property market is well covered by property economists like Francois Viruly of Viruly Consulting, Irwin Rode of Rode & Associates, and commercial property body Sapoa's independent physical property research.

However, De Rauville concurs with Vontas on the reason for the lack of research on the listed property sector.

"Generally, listed property, because of its predictability, is not the most exciting sector to analyse. Often analysts use it as a stepping stone to move on to other sectors which are bigger and less predictable," says De Rauville.

Analysts also apply the knowledge they acquire to manage physical property or move on to asset management, she says.

"There is a high turnover among listed property analysts and this prohibits the continuity of quality research. Because there is a lack of continuity, the quality of research on listed property stocks is substandard and as a result investors make bad investment decisions," she says.

Investors who have burnt their fingers on listed property would rather invest in the better researched sectors of the JSE Securities Exchange SA.

Viruly says there is a need for "much more in-depth analysis". The bigger listed property funds probably get the necessary attention from analysts than the smaller funds.

However, the sector is becoming more exciting, and could start attracting more analysts.

In the past year the listed property sector has outperformed equities. "There is a greater interest in the sector. Viruly says.

He says research is now critical so investors can "bet on the right horse".