THE decision to diversify investment into listed property securities by property loan stock company Growthpoint seems to be paying off with the group reaping a 9,2% or R60,5m capital appreciation in three months from these investments.

GROWTHPOINT Properties could become the largest listed property fund on the JSE Securities Exchange SA if speculation that it is vying for the assets of Primegro Properties is true.

Tempers are wearing thin in the JSE Security Exchange's real estate sector, where burgeoning investment funds compete for slim pickings of scrip in 20 property unit trusts (PUTs) and property loan stock companies (PLSs).

REDEFINE Income Fund CEO Peter Penhall has challenged criticism of the hybrid property loan stock company structure, saying specialist equity managers would not necessarily have the depth of knowledge of the property market a hybrid's manager has.

Growthpoint's decision to invest in a portfolio of linked units signals the growing popularity of a hybrid property loan stock structure, but questions about the merit of this hybridity remain.

But listed sector is starting to offer good buying opportunities for investors

GROWTHPOINT, an Investec Properties-managed fund, is expanding through a number of projects.

But some PUT’s and PLS’s are starting to look cheap.

Flurry of new listings boasting high-risk yields of more than 18% The JSE's property loan stock (PLS) sector is expanding fast and, for the first time, investors have a real choice between quality yields of 11% or high risk at more than 18%. They can also choose between office, retail and industrial subsectors.

A transaction of R1,5-billion that will make Growthpoint properties the largest property loan stock company on the JSE Securities Exchange is expected to start a trend to convert direct ownership of property portfolios into property listings.