Life assurance giant Old Mutual said on Wednesday that it planned to keep its property portfolio weighted in favour of the retail sector.
The group said retail had been a major contributor the portfolio's positive performance last year.
Colin Young, head of asset management at Old Mutual Group, said the Old Mutual SA portfolio valued at R9,25bn delivered a total return of 29,3% against the Investment Property Databank (IPD) benchmark for SA of 28,8%.
Young said the portfolio also outperformed the benchmark of 22,2% for the top five institutional property owners, according to IPD research released last week.
The success of the portfolio could be attributed to the relatively strong performance of Menlyn Park Shopping Centre in Pretoria and Cavendish Square in Cape Town.
The continued growth at Gateway Theatre of Shopping in Umhlanga also contributed to the portfolio's success.
Gary Hardisty, fund performance manager at Old Mutual Property Group, said retail property made up 75% of the group's property portfolio, with offices making up 12% and 7% being industrial property.
He said the balance of the portfolio, about 7% or 8%, consisted of vacant land.
Young said part of the group's strategy was to consolidate its portfolio position in the industrial market and continue to reduce land holdings through developments and sales. Old Mutual had vacant land worth almost R500m.
However, Hardisty said a large portion of this land was situated at the planned mixed-use site of Zonki'Zizwe in Midrand.
The group was planning a mixed-use development on this 220ha site.
Old Mutual had been selling unproductive land and properties over the past five years.
"More recently we've sold off a portion of land that doesn't meet the long-term investment strategy of Old Mutual," he sad.
The sale would bring the land holdings down to 4% of the total portfolio.
Zonki'Zizwe and other development plans were in place for this land and would support the group's development pipeline for this year.
Business Day
Publisher: I-Net Bridge
Source: I-Net Bridge
