Higher earnings expected

Listed property may be everybody's favourite JSE sector but, like a newly discovered celebrity without table manners, its corporate governance is generally an embarrassment

Kerry Holdings, the group controlled by Malaysian billionaire Robert Kuok, has raised the price of the buy-out offer for its Hong Kong-listed property unit in an effort to placate minority shareholder objections to the proposed deal.

Listed property has finally wiped out its undervalued status relative to directly held property.

Property unit trust Martprop concluded the six-month period ended January with a gearing of only 6,7% which leaves the window for further geared growth wide open for the group.

DURBAN Property unit trust Martprop Property Fund anticipated finalising deals worth R150m within the next month and was actively seeking acquisitions while the market offered good values, MD Roger Perkin said yesterday.

Listed property unit trust Capital Property Fund can expect a modest increase in earnings this year, says asset management company Property Fund Managers.

Conventional wisdom suggests that with the rand improving strongly against the world’s major currencies, and with inflation and interest rates expected to head back down from their current highs, one of the best places to look for good investments would be on the listed property market. But the experts warn otherwise, saying that while property shares are expected to rerate next year, other equity investments will do better.

It seems that the underrated property sector is set for big things. In the past three years, you would have had a better return from property than equities just from the capital growth, which was 8,9% a year compared with 7,3% from equities.

There aren't any easy bargains to be picked up along the way Two years ago you could have bought virtually any property share, property unit trust (PUT) or property loan stock (PLS) and made money.