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Retail Investment - Richway

Posted On Wednesday, 07 March 2001 03:01 Published by eProp Commercial Property News
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Major growth forecast as the listed property sector reports above-average returns THE South African listed property sector presents an attractive opportunity to investors and is likely to follow the trend in Australia, where the property sector has shown enormous growth on the Australian Stock Exchange, says Richway Retail Properties CEO Peter Blanckenberg.

Property-Housing-ResidentialHe says confidence in property is rising as the sector continues to attract growing interest from investors seeking a more stable investment providing above-average returns.
'My belief in the attractiveness of property as an investment is supported by the abnormal, and in my opinion, illogical gap between the property sector index and property sector earnings.'
Blanckenberg says sector performance figures to September 30 last year show that property consistently out-performed all other asset classes, with property loan-stock companies achieving an annual return of 28,9% over a one-year period and 21,6% over the past three years.
'This was better than the JSE's all share index at 23,7% and 7% respectively, financial and industrial indices at 28% and 3,3%, and the all bond index at 23% and 17%.'
The property unit trust sector fared even better, with total returns at 32,5% over one year and 24,8% over three years.
Blanckenberg says investment in property through a listed or property loan-stock company or a property unit trust provides investors with the attraction of greater flexibility than direct property investment.
'Opportunity is presented by the securitisation of property, a trend that should see exponential growth in the R8bn Johannesburg Securities Exchange (JSE) listed property sector to as much as R30bn.' vWith the same fundamentals, the Australian listed property sector has grown from A2bn in 1985 to A29bn last year, with A19bn of that occurring in the past four years.
Blanckenberg says Richway is confident that the sector will continue to offer superior returns, real capital growth and stability, making it an extremely attractive investment alternative in an increasingly uncertain market. 'I feel that we are right at the beginning, but that we will follow the Australian trend

SECURITISATION of property in listed vehicles is becoming a worldwide trend as insurance companies and pension funds find it more practical to have an indirect, rather than a direct, investment in their large property portfolios, says Richway CEO Peter Blanckenberg.
'This is happening internationally and we believe it will happen here. It is a trend that is unlikely to be reversed.'
Blanckenberg says insurance companies that are not primarily in the property business will find it preferable to invest in listed property shares rather than directly in bricks and mortar. The dividends from such listed vehicles will assure their income streams.
If an institutional investor finds itself overstocked in property it is easier to offload shares than to sell fixed property.
Blanckenberg says securitisation also offers profitable opportunities for the state, which has vast sums tied up in property. Securitisation will afford it the opportunity to raise revenue and to generate a dividend income stream.
A recent estimate by the SA Property Information Exchange of property owned directly by institutions is about R60bn.

Last modified on Saturday, 26 April 2014 10:04

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