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Listed property sector ripe for foreign investment

Posted On Wednesday, 10 November 2004 02:00 Published by eProp Commercial Property News
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Growthpoint to take its South African pitch on Investec's UK road show in the hope of attracting European customers

Angelique de RauvilleONE of the ingredients needed for substantial growth in the listed property sector in SA is a broader investor base that includes foreign investors.

Angelique de Rauville, MD of listed property portfolio management company Provest, says s he does not believe enough is being done by listed property funds to attract international investors.

De Rauville says there has hardly been any international interest in the South African listed property sector.

A few property unit trusts and property loan stock companies have explored property investment opportunities abroad, she says, whereas the focus should be on achieving increased interest in the South African listed property sector from foreign investors.

De Rauville says global trends showed that growth in the listed property sector in Europe and in countries such as the US, the UK, Canada and Australia, had been coupled with an increase in interest from a broader base than just local investors.

Given SA's stable and growing economy and an underrated listed property sector, there is an opportunity to attract international interest here, she says.

"If we are going to attract international interest, we need to go on an education drive demonstrating the advantages of investing in SA and property as an asset class."

She says that only after educating foreign markets about listed property in SA will the listed property sector obtain a broader investor base and increase demand for stock. This will in turn drive up unit prices.

Meanwhile, Growthpoint Properties, the largest property fund in the listed property, sector with a market capitalisation of about R4bn, will be promoting itself and highlighting the listed property sector in the UK in the next few weeks.

Growthpoint is managed by Investec Property Group.

Growthpoint CEO Norbert Sasse says Investec Securities will be hosting a CEO conference in London on November 18 and 19.

Every year Investec Securities, the stockbroking arm of Investec Bank, invites 20 of SA's top companies to a conference to promote South African business interests.

"We've managed to get Growthpoint on to the list. It is the first time a property company is included," says Sasse.

About 15 US and UK emerging market fund managers are invited to the conference. They are given a list of South African companies and asked which CEO they want to meet.

Sasse says that nine out of the 15 fund managers have requested to have a one-on-one session with Growthpoint.

He says he will be giving them an overview of the South African listed property sector, explaining the size of the market, who the main players are, as well as the overall liquidity of the sector.

He says he will focus on Growthpoint because it is the largest in terms of market capitalisation and assets and is the most liquid fund in the listed property sector.

"The purpose is twofold: to educate foreign investors who have shown an interest in the listed property sector and secondly to do a focused presentation on Growthpoint and how it fits into the listed property scene," says Sasse.

Among other South African companies invited to the conference are Sasol, Anglo American and Kumba Resources.

Colin Young, fund manager of Old Mutual's South African-listed property funds, says he believes the South African listed property sector will see more foreign investment. Young says a mutual fund manager from Credit Suisse in Switzerland is already in the process of investing in Old Mutual's South African Quoted Property Unit Trust, which invests in the listed property sector on behalf of clients.

He says SA can expect foreign interest because of it s booming tourism market. The first step, he says, is for foreigners to buy residential property, followed by investments in commercial and retail properties.

Young says that US fund managers have already admitted that they see emerging markets outperforming developed markets in the short term.

He says these fund managers have already identified Brazil and SA as the most attractive emerging markets behind China

Last modified on Wednesday, 14 May 2014 14:35

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