James Howard, a portfolio manager at Futuregrowth, said the fund was becoming a core building block in socially responsible investment (SRI) portfolios due to its inherent liquidity and sustainable, long-term real returns which he said were ideal for pension funds. Recent performance of the fund compares favourably with the listed property sector.

The fund is currently invested in 14 retail properties spread across eight provinces in areas such as Mafikeng, Kanyamazane, Tulamahashe and Mkhuhlu. The two newest retail investments are situated in Katlehong, Gauteng and in Dennilton, Mpumalanga.

These highly populated areas suffer from severe unemployment and the new retail developments create both employment and entrepreneurial opportunities for the local communities.

In all of the Community Property Fund's retail developments local labour is primarily sourced during the building phase and once complete is used in the provision of security, cleaning and maintenance services as well as centre management.

Howard said that a key requisite when building the centres was ensuring that people in the area benefited most from the development.

“In some of these rural areas there has been no development at all and few employment opportunities, if any, exist. Katlehong, for example has a population of 350 000 of which fewer than 80 000 are fully employed. Most importantly, these centres provide access to services which were not previously available to these highly populated and underserviced areas of South Africa.” 

The Community Property Fund has grown significantly since a joint venture was set up with the Public Investment Corporation (PIC) just over 12 months ago in order to expand the development fund. 

Gary Goliath, portfolio manager at Advent Asset Management, which was created by the partnership to manage the fund, said: “It has launched us into a new era: we can now invest in much larger centres.”

Goliath said that when looking for new opportunities, the fund focused on stable communities within underserviced areas. “The fund has been building and managing properties in this space for 12 years and is expert at targeting the high impact developmental projects,” he said.