nd More new property loan stock listings are expected on the JSE before year end.
South African listed property outperformed the JSE All Share Index in June 2011 for the fourth consecutive month, reports the Property Loan Stock Association (PLSA).
The steady resurgence of SA listed property prices (J253 index) since March 2011 has seen the sector recover by over 9% during this time. The SA listed property sector is now at the same high levels achieved in January this year.
Head of Property Funds for Stanlib, Keillen Ndlovu explains that the strengthening in bond yields in mid-March this year resulted in listed property’s increased attractiveness relative to bond market, driving heightened interest in the listed property sector.
Year to date, to 6 July 2011, listed property has shown returns of 4.7%, compared to 1.4% for the JSE All Share Index and 2.8% for the bond market. The listed property sector reported total returns of 1.2% for June 2011, compared to negative returns of -2% for the All Share.
Property loan stock counters topping the performance list for June 2011, according to research published by the PLSA and undertaken by Grindrod Asset Management, are Premium Properties Limited with a return of 10.5% followed by Fortress B at 6.2% and Acucap Properties at 5.4%.
The research demonstrates that some property loan stocks are already showing double-digit returns for the year-to-date to June 2011: Fortress B at 23.1% and Hospitality A at 11.5%
The market capitalization of the combined property loan stock sector continues to increase, reinforcing its position as a distinctive asset class. The listed property sector is now over R130 billion with property loan
stock weighing in at the R90 billion mark, spread over 13 publicly-traded companies.
More new property loan stock listings are expected on the JSE before year end, including Dipula Income Fund.
With two new listings already this year, and the further listings expected in the coming months, it is a good sign for the sector. They show opportunity and confidence in the listed property sector, based on its positive past performance and its capacity for healthy future returns both immediately and in the long-term.
*Norbert Sasse is the Chairman of the Property Loan Stock Association (PLSA).