Listed property stocks prove to be resilient

Posted On Wednesday, 18 February 2009 02:00 Published by eProp Commercial News
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SA listed property stocks have outperformed local equities despite the downturn in global financial markets.







South African listed property stocks outperformed local equities last year despite the downturn in global financial markets and the sector’s impressive resilience is set to continue this year, experts say.

South African-listed property outperformed South African equities by an impressive 18% last year when measuring total returns.

Norbert Sasse, chairman of the Property Loan Stock Association of SA and CEO of SA’s largest listed property company, Growthpoint Properties, says many analysts advocate property’s defensive qualities in turbulent markets. “The resilience may well be evidence of the defensive quality of South African listed property,” says Sasse.

Leon Allison, property analyst at Macquarie First South, says: “The higher returns of South African property coincided with lower volatility in prices resulting in even better outperformance on a risk- adjusted basis.” A low foreign shareholding is also contributing to the lower price volatility, he says.

“The sector’s strong performance was driven by sharply lower bond yields since July, continued growth in distributions, relatively good visibility and near-certain double-digit yields underpinning its defensiveness.”

Allison believes that 8%-9% growth is still achievable in the next 12 months. “Listed property yields of about 10% look attractive compared with 4% for general equities, while the sector also provides greater visibility of earnings,” he says.

Last modified on Friday, 18 April 2014 13:24

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