Focus on limited industries.

Posted On Wednesday, 12 March 2003 02:00 Published by eProp Commercial Property News
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Property economist Erwin Rode is criticising listed property fund managers for devoting too much energy to pursuing limited shopping centre developments while there are ample opportunities in the office and industrial property sectors.

Erwin RodeRode says property fund managers should be contra-cyclical going against the business cycle rather than pro-cyclical, if they want to capitalise on imminent changes in the commercial property market.

The retail property sector has overtaken offices as a best performing property sector in the past few years and is attracting the interest of many investors.

Investors have also been fleeing the oversupply experienced in the office sector and the underperformance of the industrial sector.

Weighting of retail properties in the listed property funds of the JSE Securities Exchange SA has been boosted in the past few months with fund managers scrambling for shopping centres.

Rode says he is puzzled by portfolio managers' insistence on chasing limited shopping centres while there are ample opportunities in the office and industrial retail sectors.

He says the office space and industrial property sectors are set to perform well in a year or two.

Indications were that the industrial oversupply was vanishing fast on the Reef.

Shopping centres were unavailable, while other segments of the market were about to start performing well.

"Taking a five-year view, shopping centres will not be as lucrative as in the past 30 years."

Two years from now, the office market would look different, and property fund managers should start gearing themselves for this.

Last modified on Tuesday, 06 May 2014 15:37

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