News

Listed property is going from strength to strength. The property trust sector has shown a growth of 42% over the past year compared with the all-share index showing of -27%.

While the rand’s consistent rise spells bad news for SA rand-hedge stocks, investors in listed property have reason to be happy because this sector closely tracks the long-bond yield, which is drifting lower as US and European investors pour money into SA long bonds.

Listed property has finally wiped out its undervalued status relative to directly-held property. This property class is now on average trading at a small premium relative to non-listed property, which should lead to more listings of directly-held property in the listed property sector.

The current boom in house prices has done nothing to benefit South Africa’s poorer home-owners.

Listed property has finally wiped out its undervalued status relative to directly-held property. This property class is now on average trading at a small premium relative to non-listed property, which should lead to more listings of directly-held property in the listed property sector.

Listed property fund managers are putting far too much effort into finding unavailable shopping centres in which to invest, while there are so many fair-priced office and industrial properties available, says Rode CEO Erwin Rode.

The notoriously difficult valuation of shopping centres may be at an end, thanks to a new valuation tool developed by Rode Valuations.

Despite a poor prognosis for rental (income) growth in the medium term, listed property still represents good value for property investors wanting a relatively secure income stream. Thus this investment class is still a credible alternative to long bonds, say property economists Rode & Associates in their latest review of the property market.

Own source Recently, strong criticism from Old Mutual Properties to Rode’s view on the state of the office market hit the headlines. Old Mutual Properties’ Ian Watt wrote in a letter to Rode’s Report that Rode’s figures are far too optimistic. Rode again contends that Old Mutual is relying on seriously flawed data for their own calculations. In any event, contends Rode, the crucial indicator to track is not so much vacancies as take-up.

Rode’s Report on the SA Property Market 2002:2

South Africa’s non-residential property market is still in the doldrums, with the first quarter of 2002 witnessing a continuation of the market’s cyclical downswing.

The recent sharp rise in long-bond rates have pushed down property unit trust (PUT) prices, which makes it difficult for owners of directly-held property to list their portfolios on the JSE Securities Exchange SA (JSE) right now.