Brave new world for professionally managed property funds

Posted On Thursday, 19 July 2012 11:20 Published by
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At an awards ceremony in Cape Town, Vukile Property Fund Limited - a listed property fund - recorded the highest annualised total return over a three-year period, based on un-geared property data for the funds measured by IPD. Delegates at the IPD investment conference, at which the awards were issued, have also heard of numerous challenges and opportunities facing the investment property industry in SA and Africa and how some funds and developers are adapting. And there is a clear message of hope gained by seeing the opportunities for what they are and adapting accordingly

 

Vukile walked away with the overall Investment Property Databank (IPD) Direct Property Investment Award 2012, sponsored by Nedbank Corporate Property Finance. It achieved a 17.5% total return across its entire property portfolio, compared to an IPD overall benchmark return of 10.9%.

This property loan stock also won the awards for office and industrial property portfolio performance. Vukile’s industrial portfolio delivered a 19.5% total return and its office portfolio achieved 16.3% total return, both sectors outperforming the IPD benchmarks substantially.

Resilient Property Income Fund notched up the top returns for a retail property portfolio with a 17.9% total return compared to the IPD benchmark return of 11.1%. This is the third time Resilient has received this award which is a confirmation of consistent performance and management quality.

Calculations are based on annualised results for the three years ending December 2011.

Announced each year at the IPD Property Investment Conference, the awards showcase superior fund performance and display the essential value of investing in commercial property.

“The awards recognise outstanding performance. IPD South Africa provides the calculations for the results. These awards are based on objective financial criteria only and reflect the underlying value of the property portfolio. We’re pleased to be part of celebrating these achievements.” says IPD SA managing director Stan Garrun.

The overall IPD universe comprises both listed and unlisted funds representing 65% of all professionally-managed real estate in South Africa. IPD also covers 72% of market capitalisation of Property Unit Trusts (PUT’s) and Property Loan Stocks (PLS’s) listed on the JSE.

Garrun adds: “The awards are based on validated results over three years. They focus on property fundamentals and exclude the impact of gearing, fees and other financial interventions that justifiably reflect in a funds’ overall result, but may mask the performance of the underlying assets. The database includes both listed and unlisted funds. This gives a fair evaluation of the quality of stock, asset selection and management performance.”

Quality data is crucial for measuring this performance, and IPD also recognises internal data excellence. Momentum Property Investment Portfolio received IPD’s Data Quality Award for best meeting IPD’s data provision criteria: accuracy, completeness, timing and detail.

Garrun comments: “Disciplined, quality data is crucial to measuring performance and can also positively affect a fund’s performance. Accurate, relevant information and transparency are the cornerstones of good governance. It supports informed investment decisions based on quality facts and confidence in the sector”.

“Besides being sponsor of the awards, we are pleased with the role that we are able to play in ensuring that the listed property market continues to thrive as proven by the performance of this sector. Congratulations to Vukile Property Fund and Resilient Property Income Fund on their achievements,” says Frank Berkeley, managing executive of Nedbank Corporate Property Finance.

Pictured and standing left to right are: Laurence Rapp (Vukile Property Fund); Stan Garrun (IPD SA); Claire Everatt (Momentum Property Investment Portfolio); Richard Thomas (Nedbank Corporate Property Finance); Ina Lopion (Vukile Property Fund) and Craig Hallowes (Resilient Property Income Fund)

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