Growing listed property piques interest

Posted On Thursday, 16 June 2011 02:00 Published by eProp Commercial Property News
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Property Loan Stocks continue to pique the interest of both small and large investors, thanks to strong returns tracked in the short-term and even stronger results posted over the long-term.

Norbert Sasse“Property Loan Stocks (PLSs) are delivering solid performance over long, medium and short time periods,” says Norbert Sasse, chairman of the Property Loan Stock Association (PLSA) and CEO of Growthpoint Properties Limited. “And investors are taking note.”

Research published by the PLSA and undertaken by Grindrod Asset Management demonstrates that some PLSs are already showing around double-digit returns for the year-to-date to May 2011: Fortress B is at some 15.9% and Octodec 8.4%.

In the three month period to 31 May 2011, highest returns were reported by Fortress B, Octodec, and Growthpoint Properties with total returns of 18.1%, 13.0% and 10.8%, respectively.

A key attraction of PLSs, points out Sasse, is that they face no restrictions on gearing or payout ratios. Strong results in an economy just emerging from the global recession are noteworthy, but investors should note the long-term performance of PLSs, too.

“Over the past decade, PLSs have outperformed the SA listed property index as a whole, and also the All Share and the bond market – and by a healthy margin,” explains Sasse.

Over the past ten years, Premium has returned the best overall performance at 37.0%, closely followed by Octodec at 33.0% percent.

Market capitalization in the PLS sector continues to increase, making it a force to be reckoned with.
“The PLS sector is close to the R90 billion mark spread over 13 publicly-traded companies, which include the recently listed Investec Property and Rebosis,” explains Sasse.

The sector giants are Growthpoint with a market cap of just under R29 billion, and Redefine with R21 billion.

Last modified on Friday, 25 April 2014 18:26

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