Listed funds outperform fixed-property market

Posted On Wednesday, 03 May 2006 02:00 Published by eProp Commercial Property News
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Listed property unit trusts, which are individually listed funds consisting of a portfolio of commercial properties, outperformed the direct or fixed-property market last year, delivering a total return of 37,5% to investors.

James TempletonThe latest South African Property Index prepared by commercial property association the South African Property Owners' Association and Investment Property Databank revealed a robust fixed property market with total returns amounting to 30,1% for last year.

Fixed property delivered income returns of 10,3% and capital growth of 18,1%, while property unit trusts  achieved 7,8% in income returns and capital growth of 29,7%.

James Templeton, spokesman for the Association of Property Unit Trusts, says that property unit trusts have consistently outperformed the commercial property sector average of the over the long term periods.

Over a three-year period, property unit trusts provided investors with a compound annual return of 33,7%, compared with an annual average of 22,8% for the fixed property sector .

Templeton says the better performance can be attributed to the fact that for many years, property unit trusts and other listed property vehicles traded at discounted rates below their net asset value.

But the market has rerated as a result of the falling interest rates and property unit trusts now trade at a premium to unlisted property, indicating that listed property is now being taken more seriously as an asset class.

 

Last modified on Tuesday, 06 May 2014 13:36

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