Out of favour, not out of mind
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.