Fortress REIT Limited A shares have recorded the best performance among real estate stocks on the JSE this year, with an impressive 19.5% total return.

Wednesday, 06 February 2019 13:27

Re-rating on the cards for SA REIT sector

South Africa’s real estate investment trust (SA REIT) sector is heading for a re-rating; the question is whether the sector will rally this year or next?

The SA REIT sector’s focus on improved corporate governance is expected to support positive sentiment for investment in listed property in 2019.

Ingenuity Property Investments sees its headline earnings per share fall 23% from 4.7c to 3.6c in the year to August amid difficult market conditions.

Tower Property Fund grows its distributable earnings by 61% to R221m in the year to May.

The argument has often been made that the reason the SA listed property sector has delivered good returns over time, apart from a declining yield environment, is primarily due to its predictable and growing income stream.

According to Catalyst Fund Managers, the SA Listed Property Index (SAPY) recorded a negative total return (-2.98) for the month ended 31 January 2016.

According to Catalyst Fund Managers, the SA Listed Property Index (SAPY) recorded a negative total return (-6.12%) for the month ended 31 December 2015.

The weeks-long relentless heat wave hitting South Africa provides a direct contrast to what is happening to the rand: a tsunami.

Investors might be in a rush to see the back of 2015. Despite a dispirited Alsi, the property sector presents signs of good health.

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