Good growth…

In three years, total capitalisation of listed property counters on the JSE has risen from R10bn to R40bn, while the number of listed property companies has grown to 36.

Liquidity has rocketed, too. Over the same period, the quarterly value of traded stock has grown from R100m to close to R5bn.

In recent years, listed property has outperformed inflation, cash and long-dated bonds. The yield gap versus bonds is solidly in favour of listed property (9.55% v. 8.22%). Annual returns over three years exceed 33% p.a.

According to Sean Segar at STANLIB, the yield gap explains the growing appetite for listed property unit trusts among local investors, whether they’re income-dependent pensioners or big institutions.

He adds: “Capital risk is similar to that of bonds, but yields tend to be higher and grow over time – no wonder more investors seek exposure to this relatively new asset class.”

Even three years ago, many balanced portfolios focused simply on equities, bonds and cash. Listed property was excluded because South Africa’s listed property sector was both small and illiquid.

Segar notes: “In three years, listed property has become an accepted part of a well-diversified portfolio.