Gerald Nelson, Association of Property Unit Trusts (Puts) chairman, says the SA property investment market faces the same challenges and opportunities as the Australian market did 10 years ago.
These include a demand for greater liquidity, a decline in interest rates and relatively low and stable inflation.
Within a decade the Australian listed property-trust market grew from A5bn to A36bn in reaction to the demand for liquidity, and 70% to 80% of property is now listed.
'SA's total commercial investment property market is estimated to be in excess of R100bn ' says Nelson.
'Given stable economic fundamentals, if we follow the Australian trend there is no reason why the listed property sector should not grow to R50bn in the next three to five years.'
This growth will be driven to a certain extent by existing funds enhancing the size of their portfolios through the issue of new script.
However, Nelson says greater potential lies in the listing of new vehicles with a number of new players seeking to enter the market.
The direct property holdings of institutions and pension funds stand at about R60bn.
With the greater flexibility that listed property offers over direct property, there is every likelihood that a large proportion of these holdings could be transferred to the listed property sector in the short term. A comparison of total annual returns shows that Puts, with 27,9% over one year and 27,5% over three years, continued to outstrip the all share index at 0% and 13,2% and the all bond index at 20,1% and 18%.
Australia's property investment market has undergone a consolidation and comprises 30 listed funds, with a market cap of A36bn an average of A1,2bn per fund.