THE perceived negative effect of the rand-dollar exchange rate on the industrial property market could be a "red herring", Roger Perkin, the managing director of listed property unit trust Martprop said yesterday.

Perkin, one of the speakers at the first annual IPD/Sapoa Property Investment Conference in Sandton yesterday, said big industrial companies involved in exporting that would be affected by the rand's exchange rate tended to own their property.

Perkin said that when measuring what the effect of the strong rand would be on the industrial property investor, it was only the extent to which your tenants' business was driven by the performance of exporters.

Most of Martprop's tenants were more affected by internal growth, lower interest rates and inflation, Perkin said.

He told the conference that with inflation and interest rates coming down, there would be positive spin-offs for tenants whose business was local.

"Even with our big distribution tenants, most of them distribute to the local market and not necessarily overseas."

Metboard Properties, which focused on industrial property, agreed with Perkin.

Norbert Sasse, property fund and asset management head for Investec Property Group, which managed Metboard, said the group had done an analysis of Metboard's exposure to the export industry.

The study found that less than 8% of its gross rental income came from tenants who were in any way associated with the export industry.

Nov 05 2003 07:15:13:000AM Nick Wilson Business Day 1st Edition