Out of favour, not out of mind

Finweek English Edition - - UNITRUSTS -

listed prop­erty is out of favour, with many of the mar­ket ex­perts ar­gu­ing the easy money has been made and yields will come un­der fur­ther pres­sure, par­tic­u­larly if the econ­omy doesn’t kick back into gear. One of the in­dus­try lead­ers is the Stan­lib Prop­erty In­come Fund, jointly man­aged by Keillen Ndlovu and Evan Jankelowitz.

Over the past one-, three-and fiveyear pe­ri­ods the fund has con­sis­tently ap­peared in the top quar­tile of re­tail of­fer­ings in this mar­ket sec­tor, in­di­cat­ing a well-man­aged of­fer­ing that un­der­stands its mar­ket. A prop­erty in­come fund is good for in­vestors look­ing for steady and de­pend­able quar­terly dis­tri­bu­tions and want­ing to grow in­come and cap­i­tal over the long run. With many mar­ket com­men­ta­tors say­ing re­tail in­vestors need to steel them­selves for an ex­tended pe­riod of lit­tle or no growth, an in­vest­ment in an un­spec­tac­u­lar listed prop­erty fund with reg­u­lar dis­tri­bu­tions might prove use­ful.

“We be­lieve the phys­i­cal prop­erty mar­ket is near­ing the bot­tom. How­ever, the re­cov­ery will be a muted one,” Ndlovu said re­cently. He added he ex­pected in­come growth of 6,8%, putting prop­erty on a for­ward yield of 8,8%. That’s a su­pe­rior re­turn to bonds (8,5%) and cash (7%).

One op­por­tu­nity the fund has iden­ti­fied is the listed uni­verse of funds is likely to change for the bet­ter over the next six months, with three new funds com­ing to the mar­ket. Those will of­fer in­vestors other choices in the res­i­den­tial, health­care and re­tail prop­erty mar­kets.

Newspapers in English

Newspapers from South Africa

© PressReader. All rights reserved.