Why invest in SA's listed property?

The South African Listed Property Index (J253) recorded a total return of 6.74 percent in November 2012 while the Property Loan Stock Index (J256) and Property Unit Trust Index (J255) recorded returns of 6.07 percent and 7.76 percent respectively over the same period.

For the last 12 months South African Listed Property, as an asset class, has recorded the highest total return of 38.24 percent.

This is according to the Catalyst Fund Managers who note that capital markets firmed during the month with the yield to maturity on the Long Term Government Bond Index ending at 7.04 percent.

Firmer capital markets supported South African listed property pricing and the historic yield of the sector ended the month at 6.51 percent, they say.

According to the managers, South African listed property recorded the highest total return (6.74 percent) of the four traditional asset classes for November.

South African Equities (2.64 percent) and South African Bonds (0.88 percent) were the next best performing asset classes for the month.

For the last 12 months South African Listed Property, as an asset class, has recorded the highest total return (38.24 percent), followed by SA Equities (19.80 percent), SA Bonds (14.20 percent) and Cash (5.57 percent).

‘We have previously commented on the high correlation between SA listed property yields and long term government bond yields.”

The outlook for distribution growth in 2012 remains reasonable and the sector is likely to deliver inflationary type growth in income distributions.

A risk to SA listed property returns in the short term will be a weakening in capital markets, according to the managers. – Denise Mhlanga