SA property counters record growth

Over the past six weeks, nine counters, which make up over 60% of the R155 billion SA listed property sector, reported results for the six-month period to December 2011.

Together, they delivered a market capitalisation weighted average distribution growth of 6.6%, compared to the same period to December 2010.

The counters include Capital Property Fund, Growthpoint Properties, Resilient Property Income Fund, Hyprop Investments, SA Corporate Real Estate Fund, Fortress Income Fund, New Europe Property Investments (NEPI), Emira Property Fund and Hospitality Property Fund.

Norbert Sasse, Chairman of the Property Loan Stock Association (PLSA) says South African listed property's income returns were performing positively, showing the sector's defensive performance in challenging economic conditions.

The PLSA is the unified voice of the property loan stock (PLS) sector in SA.

The PLSA reported that for the last 12 months to the end of February 2012, SA listed property recorded the highest total return of any asset class at 21.75%.

It is followed by SA Bonds with a total return of 13.59%, equities at 9.63% and SA Cash 5.70%.

Keillen Ndlovu, head of Property Funds for Stanlib, explained the distribution growth reported by the funds to December 2011 was achieved despite tough economic circumstances, worsened by rising utility costs.

Ndlovu said that some results surprised on the upside. These included Growthpoint Properties' distribution growth of 6.1%, NEPI's 15.5% growth in distribution and Hyprop, which hit 10.4% distribution growth.

"NEPI is benefiting from the under-shopped Romanian retail market and yield enhancing acquisitions. Growthpoint's numbers were enhanced by positive letting in the office and industrial sectors," says Ndlovu.

Vacancy levels have been a major factor in performance, and Ndlovu noted that office vacancies seemed to be increasing, whereas industrial and retail vacancies were dropping.

SA Corporate, Emira, Fortress, Growthpoint and Resilient all reported improved vacancy levels.