Listed property in global uncertainty

Posted On Friday, 13 January 2012 02:00 Published by eProp Commercial Property News
Rate this item
(0 votes)

Following the stellar 30% total return for 2010, some analysts believed listed property was fully priced. But the search for reliable cash flows amid ongoing global uncertainty continued last year, and the sector achieved a respectable 8,93% total return for 2011 compared with the all share’s 2,57%.


Though property is unlikely to shoot the lights out in 2012, a total return in the region of 10%-15% is widely expected. Like last year, the FM believes the Resilient group’s hybrid speculative play, Fortress Income Fund (B units), will again lead the pack.

At a historical income yield of around 3% versus the sector’s 8%, the counter isn’t cheap. And many may rightfully argue that the rally in Fortress B’s share price is not sustainable — the stock was up a whopping 103% from January to November 2011. But Fortress is expected to continue to grow its income at a quicker rate than any of the sector’s other 20-odd counters, which should create more share price upside.

Management recently indicated that the fund is on track to deliver overall income growth of 10% for the year to June 2012. That means B shareholders’ income payouts will swell by a hefty 50% this year. The growth average for the sector is 5%.

Fortress focuses on commuter malls near taxi ranks in platteland areas like Nelspruit, Secunda and Empangeni. Most cater to low-income shoppers. It also has stakes in sister funds Capital Property Fund, Resilient Property Income Fund and Romanian-focused New Europe Property Investments.

Last modified on Friday, 18 April 2014 17:19

Most Popular

Redefine making headway following its announcement to acquire balance of EPP shares

Nov 29, 2021
Andrew Konig (1)
Redefine Properties today announced that it proposes to make a share-for-share offer to…

New president elected by Consulting Engineers South Africa (CESA)

Nov 29, 2021
Consulting Engineers South Africa’s (CESA) 68th Annual General Meeting held on Wednesday,…

Silver lining from unrest and Covid-19 for businesses that can reimagine sustainable future growth

Dec 01, 2021
The unrest and looting that took place in many parts of KwaZulu-Natal and Gauteng in July…

Please publish modules in offcanvas position.