With lower interest rates now almost a certainty, a rerating of the better performing property loan stock companies is very definitely overdue, said Mike Flax, CEO of Spearhead Property Holdings, the Cape headquartered JSE Securities Exchange listed company.

"Investors," said Flax, "have in the last year become uncomfortably aware that S A property loan stock companies have very different levels of performance - they are by no means all the same."

Many, said Flax, are hamstrung by inefficient financial structures, with too many deferred units which dilute earnings per share and handicap income growth. Others, he said, are simply invested in the wrong property portfolios or over-borrowed.

By contrast, said Flax, Spearhead is one of a handful of companies now due for a rerating.

"Both our share price growth (46% in the last year) and our earnings per unit growth (95% in the last year) have been well ahead of the sector average," said Flax. "With the lower interest rates we could, therefore, see our shares scaling new peaks before the end of this year."

The good news, he added, is that all the indicators now point to a sustained bull run in the better property loan stock companies for at least two years.

Flax reminded investors that Spearhead now has a R500 million portfolio and that this currently includes three of their own developments which when complete will be worth some R300 million. All of them, he said, are performing ahead of expectations: they are the 21 000 m2 R50 million Spearhead Business Park at Montague Gardens, now onto its second phase, the R65 million National Prosecuting Authority building in Buitengracht Street, on track for completion next week and the R180 million South Seas apartment complex in Beach Road, Mouille Point, where almost complete sell out has now been achieved in only three weeks.

In earlier statements, Flax has revealed that for the first time in its four year history, Spearhead has been able to attract significant capital from such major investors as the Investec Property Unit Trust, the Standard Bank Property Equity Trust, Redefine Income Fund, M Cubed Property Unit Trust and that the company portfolio this year has been increased by R200 million worth of acquisitions.

"We believe that we will continue to grow," said Flax, "but our primary aim remains to achieve better profits on the capital employed and, therefore to be recognised as one of the top performers in this field."

For further information please contact Mike Flax on 021 425 1000.