Re­cov­ery play


LONG-SUF­FER­ING share­hold­ers of Old Mu­tual-man­aged SA Cor­po­rate Real Es­tate Fund are no doubt chuffed the com­pany fi­nally ap­pears to have turned the cor­ner. The stock has been a peren­nial un­der­per­former with lit­tle, if any, growth posted in in­come pay­outs over the past three years. So it came as a bit of a sur­prise when man­age­ment re­cently re­ported a healthy 7,1% in­come growth for sec­ond half 2010 (yearon-year).

The stock’s im­proved growth per­for­mance has been pri­mar­ily driven by in­creased de­mand and strong rental growth in its in­dus­trial port­fo­lio. For the 12 months to end-De­cem­ber, in­dus­trial va­can­cies dropped from 6,1% to 2,9%, while rentals were up an im­pres­sive 13,7%.

SA Cor­po­rate’s poor per­for­mance over re­cent years was pri­mar­ily blamed on its over­ex­po­sure to smaller and mid-sized cen­tres (be­low 35 000sq m), many of which are lo­cated in older, sec­ondary ar­eas. It also

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