LINDSAY WILLIAMS: Listed properties have done so well - I think it was 50% in 2004 - I don’t suppose we’re going to replicate that performance in 2005? On the other hand I don’t suppose there’s really that much downside at the same time - I keep on seeing these new building sites, I keep on seeing these new developments - and if I get stuck behind another brick lorry at the robots trying to turn left I don’t know what I’m going to do! It’s booming isn’t it?

ANGELIQUE DE RAUVILLE: I think it would be very naïve of an investor entering into the listed property sector now to imagine that they would achieve the same returns going forward that listed property has delivered over the last few years - having said that, listed property is a moderate investment opportunity, where returns of between 16% and 18% are quite achievable over the next twelve months. That’s mainly driven by earnings-growth from the listed property stocks filtering through to share price appreciation.

LINDSAY WILLIAMS: I know one of their main bugbears for overseas investors about this particular sector is the lack of liquidity. In JSE terms it’s not that illiquid, but on the other hand if someone wants to take a meaningful stake - for example Fidelity was on the show a couple of weeks ago, the world’s biggest fund manager - is there enough liquidity?

ANGELIQUE DE RAUVILLE: In volume yes - 30% of the listed property sector trades on annual basis, which is much in line with the JSE Alsi 40. In rand terms 30% of R45-billion is R15-billion rand a year - which is not enough for an international investor.

LINDSAY WILLIAMS: So should we be freeing up more of the new property that’s going up - should that be listed on the JSE?

ANGELIQUE DE RAUVILLE: We would like to see more physical property sold into the listed property sector so we can achieve an increase in market capitalisation - and an increase in liquidity - in order to attract international investors.

LINDSAY WILLIAMS: Surely the market knows that - surely the market is incredibly eager to get themselves onto the JSE - why then is it so slow in happening?

ANGELIQUE DE RAUVILLE: Commercial property at the moment is very sought after - so there is a reluctance from property investors to sell into the listed property sector when the asset class is booming in the current market.

LINDSAY WILLIAMS: Commercial, retail or industrial - that’s what I keep on getting asked, and I get a different answer from every single person that comes in here. People say: "The retail market is oversupplied - you’ve got to get into industrial, there’s a shortage of good quality industrial space." Where do you stand?

ANGELIQUE DE RAUVILLE: All of the above. We think office, industrial and retail - depending on the asset itself - can offer investors long term and attractive returns.

LINDSAY WILLIAMS: That’s a real fence-sitting answer - you must favour one particular sector? Or maybe a geographic location? Give us the really important growth nodes?

ANGELIQUE DE RAUVILLE: From a listed property sector point of view the companies and funds that are showing the most robust earnings growth at the moment are those the predominant retail exposure - with very attractive earnings growth filtering through as a result of the boom we have seen in the consumer spending market.

LINDSAY WILLIAMS: The interest rate situation was put into focus again this week - in terms of the producer price index and the consumer price index - both more or less benign, which says that there’s probably not going to be a rate rise in the near future, which therefore means that property in general should remain buoyant. What’s your view on interest rates at Investec?

ANGELIQUE DE RAUVILLE: The Investec view is that interest rates are in all likelihood going to remain stable in the short term. Certainly the view of Provest, Investec’s listed property asset management division, is that the next movement will be downwards - and that can be considered favourable for both the physical and listed property sector.

LINDSAY WILLIAMS: Last year we saw 40% to 50% - I can’t exactly remember what it was for the listed sector on the JSE - this year are you’re expecting something above average?

ANGELIQUE DE RAUVILLE: From 16% to 18% - there should be a tendency from an investment point of view to favour those listed property stocks that are showing robust earnings growth. There are a handful that we are expecting to deliver double-digit earnings growth - which is very attractive particularly given that the listed property sector is coming off a low base in terms of earnings performance. Over the last three years there has been close on zero percent earnings growth from this asset class.