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11 Jan 2013

The outlook for distribution growth in 2013 remains reasonable making listed property an attractive alternative investment asset to cash and bonds.

The value of R100 invested in the SA Listed Property index one, three and five years ago would be worth R135.88, R191.83 and R209.02 respectively on 31 December 2012.–

According to the Catalyst Fund Managers January report, the sector is likely to deliver inflationary type growth in income distributions.

“Listed property income has the potential to grow whereas the income on vanilla bonds does not grow and the sector remains an attractive alternative to cash and bonds over the long term,” the managers say.

They point out that as of 31 December 2012 the historic rolled income yield of SA listed property was 6.56 percent (7.93 percent on 31 December 2011).

Over the long term the total return from listed property will be driven by the income yield plus growth in that income, they say.

The report reveals that the SA Listed Property Index recorded a total return of 0.36 percent in December 2012, the Property Loan Stock Index (0.85 percent) and the Property Unit Trust (-0.15 percent).  

Three companies listed on the Johannesburg Stock Exchange Real Estate sector including Annuity, Ascension, and Delta Property Fund in 2012 taking the number of investable listed property securities (Catalyst universe) to 33 in the year, they say.

According to the managers, the market capitalisation of the sector grew by approximately 39 percent to R211 billion, with the three new listings adding approximately R4 billion to the total.

They point out that listed property was the best performing asset class (35.88 percent), followed by equities (26.68 percent), bonds (16.02 percent) and cash (5.55 percent).

Strong capital markets was the biggest driver of the strong total return performance from the listed property sector in 2012.

They say as of 30 November 2012 the historic rolled income yield of listed property was 6.51 percent.

Furthermore, they note that the value of R100 invested in the SA Listed Property index one, three and five years ago would be worth R135.88, R191.83 and R209.02 respectively on 31 December 2012.– Denise Mhlanga

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