New and niche

Finweek English Edition - - UNITTRUSTS -

ONE AS­SET CLASS at­tract­ing quite a lot of in­ter­est from South African in­vestors is that of prop­erty over­seas. The rea­sons for that are ob­vi­ous: diver­si­fi­ca­tion off­shore, ex­po­sure to hard cur­rency as­sets and – top­ping the list for many South Africans – be an op­por­tu­nity to re­move some of their per­ceived SA-based as­set risk.

For that rea­son they may be in­ter­ested in a new prop­erty of­fer­ing from Grindrod As­set Man­age­ment. For most re­tail in­vestors, Grindrod isn’t a name that would be front of mind when con­sid­er­ing an in­vest­ment prod­uct, but more likely associated to the group’s ship­ping busi­nesses. But the niche man­ager is carv­ing out a rep­u­ta­tion of solid per­for­mances in the prop­erty sec­tor and might be a name to watch in the fu­ture.

The man­ager es­tab­lished its Grindrod Global Prop­erty In­come Fund in 2009, which cur­rently has around R470m in as­sets un­der man­age­ment and re­cently an­nounced an off­shore of­fer­ing in the form of its Grindrod In­ter­na­tional Prop­erty Fund (IRE).

The prod­uct will al­low SA in­vestors to ob­tain off­shore ex­po­sure to mar­kets such as the United States, Canada, Eu­ro­zone coun­tries, Bri­tain, Sin­ga­pore, Ja­pan, Hong Kong and Aus­trala­sia, with 90% of the fund’s as­sets sitting in those mar­kets.

“The SA Re­serve Bank re­cently raised the in­di­vid­ual off­shore in­vest­ment al­lowance to R4m/ per­son/year, in­creas­ing the need for at­trac­tive in­ter­na­tional in­vest­ment op­tions for South African in­vestors. Hence the cre­ation of this fund,” says fund man­ager Greg Rawl­ins.

Listed off­shore prop­erty hasn’t been the best in­vest­ment class over the past few years, par­tic­u­larly with a strong cur­rency. So why in­vest in this fund? “The new fund has a for­ward yield of 6,5% – in stark con­trast to the low bond and money mar­ket yields in­vestors have been forced to ac­cept in in­ter­na­tional mar­kets since cen­tral banks cut in­ter­est rates to stim­u­late eco­nomic growth,” Rawl­ins says. He de­scribes the fund as hav­ing a medium risk pro­file due to geo­graphic, cur­rency and sec­tor diver­si­fi­ca­tion.

In­vestors used to quar­terly dis­tri­bu­tions from their prop­erty in­vest­ments should note IRE in­stead has a bian­nual


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