Listed property continues to be an attractive investment compared with other asset classes, but it is likely to achieve singledigit total returns this year.

On the year to date, the FTSE/JSE SA listed property (SAPY) index has grown about 1.8%, while the all share has climbed 0.53%, both on an index growth basis.

Catalyst Fund Managers reported that the SAPY delivered a total return of 8.82% during the first nine months of 2016, strongly outperforming other general equities that returned 4.82%, and also beating cash, which managed 5.42%. But bonds were the stand-out asset class with a 15.05% return.

Listed property’s total return including dividends was still an attractive 8% in 2015, but was well short of the strong 26.6% recorded in 2014.

Jay Padayatchi, the executive director at Meago Asset Management, said the listed property sector had been affected largely by currency movements in 2016, so those stocks that had achieved returns based on good property fundamentals had “really stood out”.

“Some of the local winners include SA Corporate Real Estate Fund and Rebosis Property Fund. SA Corporate has impressed with its strong local refurbishment and redevelopment pipeline including its residential growth strategy.

“Rebosis has also done particularly well, recovering from much of the initial negativity surrounding its acquisition of the Billion assets,” Padayatchi said.

Growthpoint Properties performed well in 2016, achieving a total return of 17.27% in the first three quarters of the year, according to Catalyst. Its main rival, Redefine Properties, did even better, returning 22.35% to investors over the same period.

source: Business Day