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SA Listed Property Index takes a breather in November after strong 2015

Posted On Monday, 04 January 2016 13:26 Published by
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Investors might be in a rush to see the back of 2015. Despite a dispirited Alsi, the property sector presents signs of good health.

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The SA Listed Property Index, up 15% year to date, speaks for itself. In contrast, having lost 2%-plus during this period, the Alsi is bound to end 2015 on a poor note after endearing investors in the recent past. Having vaulted markedly during the year, defying a soft market, the SAPY took a breather to end November in the south as losers outnumbered winners.

For the second month in a row, Tradehold emerged the best performer after pushing ahead 32.3% in November. Last week, Tradehold was changing hands at R31 per share, hovering near all-time record highs, or R5.1 billion in market cap, on the JSE. Growth in the stock bested Fortress-B units, which advanced 20.8%, booking it a second place during the month, partly on the Capital Property Fund news.

Lying third is New Europe Properties Investments after notching 15.2% in November. The commercial property developer and investor firm, under the baton of New York-trained Alex Morar, CEO since August, recently issued a €400-million unsecured Eurobond that matures in early 2021.

The bond, whose net proceeds will be used to refinance part of NEPI’s existing debt and for general corporate purposes including acquisitions, is provisionally rated Baa3 by Moody’s and BBB- by Standard & Poor’s, Catalyst Fund Managers this month.

Equities (11.5%) and Indluplace (9.6%) complete the Top Five. Andrea Taverna-Turisan’s Equities has had a rollercoaster of a year. It ended last month at R14.25 per share but has rapidly, and in thin trade, plunged to below the R13 mark since then.

Jointly with integrated logistical and freight movement firm Grindrod’s unit, the former will develop a 25 000m² distribution warehouse and offices for seafreight and project logistics specialists Röhlig-Grindrod (itself a joint venture). With just 6% gain for the month, Fortress-A just made the period’s Top 10.

On a year-to-date basis, Fortress-B is the best counter by far. Its inimitable 135.6% surge – effortlessly outshining both Hospitality-B (62.5%) and Resilient (54.6%), first and second runners-up – makes Fortress-B something of an investors’ darling.

In November, Fortress advised shareholders that Allan Gray and Sanlam Investment Management has reduced its beneficial interest in Fortress issued A ordinary shares. The property group also updated investors about the apportionment of proceeds for Capital shareholders, Catalyst noted in its latest monthly review.

The apportionment was calculated based on the closing prices of Fortress A shares and Fortress B shares on 20 November – the last day to trade in Capital shares in order to participate in the Fortress scheme.

Anchoring the SAPY is Ascension-A, which plummeted a heart-breaking 51% in November alone. It sought a comeback in October, but only managed to scrape a measly 1.2%. It swayed from mediocre, to nasty, to scary throughout 2015, eventually eroding a massive 54.9% in value year-to-date, according to Catalyst. In contrast, Ascension-B has fared not too shabbily, collecting 16.4% so far this year.

Meanwhile, Ascension has advised shareholders (both A and B) to exercise caution as the firm remains locked in talks with JSE authorities over the continued listing of its securities.

Synergy-B, whose holders haven’t had anything to smile about since January, emerges as the third-worst performer. It shed almost 11%, which is pretty much in line with the 15% it has eroded for the year. Also in the wimpy league, and stuck in reverse mode is Freedom Properties (sandwiched between losers Synergy-B and Ascension-A), with an 11.8% decline for the month under review but an unrivalled 62.5% for the year.

Last modified on Monday, 04 January 2016 13:48
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