Weekend Argus (Saturday Edition)
REITs shine among top listed companies, bringing smiles to shareholders
SOUTH African listed property once again ranked high among the country’s companies earning the most for shareholders.
The sector featured strongly overall, with a dozen REITs (Real Estate Investment Trusts) performing among the Top 100 Companies over five years based on compound annual growth rate.
“SA listed property companies have performed well for investors and delivered sustainable, low- risk, inflationbeating results,” says Laurence Rapp, chairman of the SA REIT Association and chief executive of Vukile Property Fund.
The sector’s leader was a g a i n Resil i e nt Proper t y Income Fund, which earned 30th place with compound growth of 31.83 percent.
Resilient was noted as an upward mover, rising from 38th position, as was Hyprop, which improved from 67th to 60th with a c o mpound a nnual growth rate of 22.41 percent.
Growthpoint was also listed as an upward mover, inching from 66th to 65th which, as the only REIT represented on the JSE ALSI 40, ranked 22 out of the Top-40 Index companies over five years with a 20.75 percent compound annual growth rate.
As revealed in SA REIT Associ a t i o n r e s e a r c h by Grindrod Asset Management, SA REITs have again outperformed equities and bonds in 2014. For the year to the end of October, SA REITs delivered a total return of 21.4 percent compared to SA equities at 10.5 percent and SA bonds at 9.3 percent.
According to Catalyst Fund Managers, listed property is also the best performing SA asset class over the 12 months to the end of October 2014. Listed property delivered total returns of 19.38 percent compared with cash at 5.73 percent, SA bonds at 8.98 percent and SA equities at 10.49 percent.
The listed property sector’s market capitalisation has grown more than tenfold from R24 billion to about R300bn.
“The sector’s prolific presence among SA’s top listed investments and its positive performance track record are reasons that any serious investor should regard meaningful exposure to listed property, as an asset class, as essen- tial,” says Rapp.
The Top 100 Companies survey acknowledges listed companies that earn the most for its shareholders in share price growth.
The rankings are determined as follows: the share price performance of every company listed on the JSE is measured based on a hypothetical initial investment of R10 000 in each share over five years, from October 2009 to the end of September 2014.
Companies are then ranked according to their share price performance, as calculated by financial services company I-Net BFA. The results were recently published in the Top 100 Companies survey carried out by the Sunday Times Business Times.