Comment on this story
Independent Newspapers
The JSE. Photo: Simphiwe Mbokazi.
The SA listed property sector surged 2.9% in the last week of August‚ bringing the year’s gains from the sector to 36.7% as of September 3.
“The equity market has gained 13% and the bond market 12% over the same period‚” said Ian Anderson‚ chief investment officer at Grindrod Asset Management. “This highlights the degree to which the listed property sector has significantly outperformed other asset classes in SA.”
Some of the recent notable events in the listed property sector include the 12.7% gains by the Investec Property Fund (IPF) after details were announced of its proposed acquisition of a portfolio of 12 retail properties‚ as well as the acquisition of three properties from Investec.
“The total acquisition cost of both portfolios is just under R1.6bn and will be funded in part by a rights offer of up to R1.5bn‚” said Anderson. “The IPF had previously announced the acquisition of two malls totalling almost R320m‚ which will also be funded by the rights offer.”
A number of the smaller listed property companies have also recently announced acquisitions.
According to Anderson‚ most of these were expected to be yield-enhancing and contributed to acceleration in distribution growth from the sector as a whole‚ which appeared to have bottomed out at an impressive 6.5% despite the obvious economic headwinds.
Growthpoint Properties (GRT) reported a 6.1% increase in distributions for the year ended June 30‚ in line with analyst expectations. Although the outlook from management was more subdued than expected‚ with it guiding for a similar level of growth in 2013‚ the share price surged 5.5% on the back of strong foreign buying.
“There are now a number of equity securities offering a higher dividend yield and better income growth prospects than GRT‚” said Anderson. “This suggests the recent price action may not be sustainable.” – I-Net Bridge
Comment Guidelines
- Please read our comment guidelines.
- Login and register, if you haven’ t already.
- Write your comment in the block below and click (Post As)
- Has a comment offended you? Hover your mouse over the comment and wait until a small triangle appears on the right-hand side. Click triangle () and select “Flag as inappropriate”. Our moderators will take action if need be.
Open all references in tabs: [1 – 3]