Growth, liquidity key for international listed property investors

Posted On Friday, 03 May 2013 10:19 Published by Commercial Property News
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Commercial property investors and anyone interested in understanding SA’s listed property sector in a global context should plan to attend the SA Property Owners’ Association (SAPOA) International Convention and Property Exhibition later this month at Sun City.

Patrick Sumner HendersonPatrick Sumner, head of global indirect property at the London-based Henderson Global Investors, is delivering a keynote address on the second day of the Convention.

While generally positive about listed property in SA, he spotlights economic threats and liquidity as disadvantages that need to be addressed.

SA's listed property is recognised globally for its conservatively and professionally-managed portfolios and diversity of property types, he says, but the macroeconomic challenges - notably currency and liquidity risks - mitigate the sector's generous yields.

Right now, global listed property investors are looking for sustainable dividend growth, development exposure in selected markets and total returns in the 10-12 percent range.

"We see value in US small and mid-cap REITs where we expect average dividend growth of around 10 percent in 2013 and 2014, on the back of improving economic fundamentals, low interest rates, access to equity and low construction levels," he elaborates.

The implementation of a new tax dispensation in SA on 1 May 2013 is expected to align SA listed property vehicles with internationally-recognised Real Estate Investment Trusts (REITs). Indeed, if all listed property companies in SA seize the opportunity to convert to REITs, SA could be the 8th-largest REIT market in the world.

Sumner agrees the new dispensation will create new opportunity for the sector as it brings SA in line with other jurisdictions.

"However, things will only improve if the growth prospects and liquidity improve," he cautions.

The 45th annual SAPOA International Convention and Property Exhibition will take place on 14-16 May 2013 at Sun City.

Last modified on Sunday, 19 May 2013 00:22

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