Solid Property sector performance

Posted On Friday, 09 February 2001 03:01 Published by eProp Commercial Property News
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It seems that the underrated property sector is set for big things. In the past three years, you would have had a better return from property than equities just from the capital growth, which was 8,9% a year compared with 7,3% from equities.

Erwin RodeRode CEO Erwin Rode predicts that total returns on listed property will once again beat inflation by a handsome margin.
And Harry Boonzaaier from Merrill Lynch says that the property sector will show a total return of 40% for the year, on top of the run over the past few years.
Recently Coronation Capital bought a controlling interest in a property management company, Pegasus (now called Corovest), which has built up more than R100m in listed
property so that Coronation's property trust managers will not have to buy property unit trusts or loan stocks on the open market when investors buy new units in the fund.
The property sector is becoming more liquid, as some listed property vehicles are expanding and issuing new units. And institutions are becoming more tempted
to put their direct properties into listed vehicles, which makes it far easier to increase or decrease the property weighting at short notice.
Rode's State of the Property Market for the quarter 2000:4 states that property unit trust (PUT) dividend streams have since the beginning of 1999 outperformed those of financial & industrial (F&I). However, F&I dividend streams have over the past few months been accelerating slightly faster than those of PUTs.
Since the beginning of 1999, long-bond yields have trended downwards. Investors have viewed long bonds and listed properties in a similar light. Large-scale securitisation - the process of converting fixed property to listed property - has come much closer through the convergence of PUT yields and capitalisation rates of directly held property

Last modified on Friday, 25 April 2014 19:49

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