There was very little wrong with the concept of property syndication, except that its shares were extremely difficult to trade,' says Flax. 'There was no readily available market place for them, and it was difficult to sell them in small lots. As a result, the industry continually suffered from a lack of funding.
'By contrast, the JSE-listed property sector has become exceptionally liquid because shares can usually be sold or bought within a few hours.'
In the past few years, the combined returns from the listed property sector have beaten the all share index by 24% in 1997, 12% in 1998, 2% in 1999 (when interest rates reached 24%) and by 26% last year.
The listed property sector remained in 'positive territory', despite some drastic drops in the all share index in the past four years.
'So long as interest rates remain about where they are, we can expect another solid performance from the property sector,' says Flax. He expects this to continue for two to three years because 'SA will have to follow the downward trend in interest rates' of the US, Europe and Japan.
'According to forecasts released by Merrill Lynch, the property sector can be expected to deliver a return of about 24% on its total investment this year. By any standards, that must rate as a highly satisfactory performance,' Flax says