Loyiso Sibali

Property Reporter

SA’s biggest listed property company, Growthpoint Properties, has been included in the MSCI emerging markets stock index by equity index provider MSCI Barra.

Growthpoint CEO Norbert Sasse said he believed the inclusion would enhance the company’s recognition and attractiveness in international and local financial markets.

The MSCI emerging markets stock index measures equity market performance of emerging markets.

As of June last year, Argentina, Brazil, China, Colombia, India, Malaysia, Russia, SA and Turkey were some of the countries, out of 25, included in the index.

Growthpoint has 436 geographically and sectorally diverse properties valued at more than R27bn and a market capitalisation of more than R17bn. It will be added to the index at close of trade next week Tuesday.

New York-based MSCI Barra has been providing global equity indices for more than 35 years. It has become the most widely used international equity benchmark by institutional investors. Its products include indices and portfolio risk and performance analysis.

Anton de Goede, portfolio manager at Coronation Fund Managers, said that despite the stock market volatility, emerging markets remained a popular risk-return diversifier in multi-asset class portfolios.

“The benefit of an inclusion in an equity index, compared to the inclusion in the recently launched property specific GPR general emerging markets index or FTSE Epra/Nareit global emerging market index, is that international investors would not need to amend any investment universe guidelines to specifically include emerging market property in an investment portfolio,” said De Goede.

Andre Stadler, MD of Catalyst Fund Managers, said another benefit was potential new foreign investment in Growthpoint. He said there was no doubt the inclusion in a major benchmark index such as MSCI would raise the profile of Growthpoint among international investors.

Leon Allison, property analyst at Macquarie Securities, said: “By implication, managers benchmarking their performance to the index will need to take a look at Growthpoint, which they may not have previously needed to do.”

Meanwhile, as far as property leasing is concerned, Growthpoint has also continued to perform well. In September, the company reported strong leasing numbers for the financial year to June, defying weak economic conditions.

Growthpoint concluded leasing deals valued at R2,44bn for more than 800000m² ² of space in its property portfolio for the past financial year.

The retail property sector was the top performer in its portfolio, bringing in leasing deals valued at more than R995m over 166000m²

Source: Business Day