The divergent performance of the listed property sector’s 50-odd counters has increased to such an extent that the share price gap between the winning and losing counters in the year to date (to March 19) has widened to a hefty 87%.
SA-focused stocks have generally outperformed their offshore counterparts. This is in stark contrast to 2017, when rand-hedge counters were making the most money for property punters.
Sectional title housing developer Balwin Properties has taken the lead in the year to date, with a share price gain of 24%. Other top performers include local residential plays Indluplace Properties (20%) and Octodec Investments (14%), as well as retail-focused Fairvest Property (16%) and Emira Property Fund (14%).
The worst performing property stocks include Fortress Reit (B), which has shed 63%, followed by Resilient stable mates Resilient Reit (-57%), Greenbay Properties (-48%) and Nepi Rockcastle (-37%).
Panic selling of Resilient companies has been fuelled by questions around the group’s cross-holdings, BEE structures and the large premium to NAV at which the stocks were previously trading.
Rand-hedge counters have been under pressure due to a stronger rand and lingering Brexit concerns. Notable losers have been MAS Real Estate (-20%), Hammerson (-19%) and Intu Properties (-18%).
Analysts expect local property stocks to continue to outperform over the next few months due to improved investor sentiment, given SA’s changing political climate under President Cyril Ramaphosa.
Bridge Fund Managers chief investment officer Ian Anderson believes local property stocks still offer plenty of upside, despite the recent run in share prices. He says a number of smaller and medium- sized companies still trade at substantial discounts to NAV, with yields exceeding 10%. These include Safari Investments, which owns a high quality portfolio of township malls; Fairvest, whose retail portfolio also caters to lower-income shoppers in high-growth nodes close to commuter networks; and Indluplace, Octodec and Tower Property Fund.