The SA Listed Property Index recorded 2.08% total return for the month ended October 2015

Posted On Monday, 09 November 2015 15:21 Published by
Rate this item
(0 votes)

Catalyst Fund Managers notes offshore counters looking to take advantage of South African investors’ appetite for offshore exposure with UK-focused specialist REIT Capital and Regional and International Hotel Group completing secondary listing’s on the JSE main board and AltX respectively. 

Paul Duncan Catalyst Fund Managers

The listed property historic yield for the 38 property companies, Catalyst Fund Managers report data on, ended the month at 5.78%. Excluding non-income distributors (Pivotal, Attacq) and 100% offshore earnings focused companies (New European Property Fund, Rockcastle, New Frontier, Capco, IntuProp, Mas, Sirius, StenProp, Redefine International and Investec Australia) the market cap weighted historic yield of the remaining companies is 6.44%.

 

Asset Class MTD  YTD  12 months
Equities 7.61% 11.26% 11.64%
SA Listed  Property 2.08% 15.62% 20.21%
Bonds  1.30%  4.00% 4.85%
Cash  0.52%  5.31%  6.39%         

 

SA Equities recorded the highest total return of 7.61% for the month. SA listed property (2.08%), SA Bonds (1.30%) and SA Cash (0.52%) were the next best performing asset classes. For the last 12 months SA Listed Property has recorded the highest total return (20.21%), followed by SA Equities (11.64%), SA Cash (6.39%) and SA Bonds (4.85%).  

Listed property companies continued reporting results during the month. Rebosis Property Fund (11% Distribution Per Share “DPS” growth), Redefine International (1.16% DPS growth), Ascension ( A share – 5% DPS Growth , B share  - 10.3% DPSgrowth) and New Frontier (New listing – maiden dividend of 3.05pence) all reported full year results for the period ended 31 August 2015.  Delta and Equites reported interim DPS growth of 7.2% and 11.5% respectively for the 6 month period ended 31 August 2015.  

The yield to maturity (YTM) on the Long Term Government Bond Index strengthened by 10bps to end the month at 8.34% (8.44% - 30th September 2015).

Specialist residential developer Balwin Properties listed on the main board during the month of October, following the completion of its R713m primary capital raised at a price of R9.88. In addition, R1.05bn was raised by way of a secondary placement by existing shareholders.

Stor-Age Property Fund, the largest self storage property fund focused on the fast growing self storage sector, is a potential new listing in the listed property sector . The company has gross property assets worth an estimate R1.3 billion representing a total GLA of 181,500m2. Stor-Age is seeking to raise approximately R700 million through a private placement and is anticipated to list on the JSE main board on the 16th of November 2015. 

For some time now we have said that Real Estate fundamentals in South Africa are challenging and this has been further evidenced by the recent reported results and listed company management team’s softer outlook over the medium term. Local listed property players continue to diversify their portfolios offshore in an effort to access stronger real estate fundamentals and attractive yield versus interest cost spreads however we caution investors to focus on the long term prospects of the assets acquired and their ability to deliver sustainable growth. 

We continue to maintain that in the short term, listed real estate pricing is likely to take its direction from capital markets rather than real estate fundamentals, earnings and earnings growth. Over the long term, real estate fundamentals, earnings and earnings growth will drive performance.

Source: Catalyst Fund Managers

Last modified on Wednesday, 11 November 2015 08:50

Most Popular

Mall of Africa Celebrates Launch of New Generation Pick n Pay Store

Sep 23, 2019
 MOA PNP  1
Today Mall of Africa welcomed one of South Africa's biggest grocery retailers to the…

Exemplar REITail Acquires Katale Square Shopping Centre

Sep 23, 2019
 JASON MCCORMICK
Real estate investment trust, Exemplar REITail, has acquired Katale Square shopping…

City of Joburg Housing Development wins UN award

Sep 17, 2019
 MESHACK VAN WYK
The City of Johannesburg’s Housing department has won a Sustainable Cities and Human…

Mixed-use is the key to funding hotel development in Africa

Sep 17, 2019
 XANDER NIJNENS
JLL’s research into global property transactions reveals that in the first half of 2019,…

Grit Real Estate financial results for the year-ended 30 June 2019

Sep 30, 2019
 BRONWNY CORBETT
London Stock Exchange listed Grit, the only listed Africa-focused income distribution…

Please publish modules in offcanvas position.