Listed property accessible easiest through unit trusts

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“The easiest way to invest is through a unit trust. You find that most insurance and asset management companies offer this platform where they have dedicated listed property funds with the minimum requirements, monthly contribution or lump sum,” Craig Smith, property analyst and portfolio manager in listed property franchise at Stanlib, told CNBC Africa.

“That would be the easiest entry point for the man on the street to invest in listed property. One would advocate that as opposed to investing directly in individual stocks because one gets the benefit of diversification and active asset management.”

According to Redefine Properties, while 2014 may be a volatile year for pricing in listed property, the sector is also expected to identify new opportunities.

“The listed sector is roughly 220 billion at the moment. It’s grown significantly over the last 10 years and that’s been on the back of a lot of new listings that have come to market. We have seen consolidation in the recent past and we certainly see that as a continuing trend in the short to medium term,” Smith said.

(READ MORE: Consolidation the next step in S.Africa’s property market)

“From emerging markets, South Africa ranks quite favourably. The market’s fairly transparent and we’ve recently had the migration to REIT, which is a global standard and ties in [with] what those standards would be across the globe. That makes it easier for investors to understand the market.”  

He also emphasised listed property as a proper income asset should one decide to invest in the sector over the long term.

(READ MORE: S.Africa poised to see specific property listings)

“The sector in the short term is going to take its lead from the bond markets, from the capital markets. We’re still seeing that the property fundamentals are still healthy, strong. Most companies are achieving their distribution guidance and, in fact, outpacing that distribution growth,”

“You have the likes of Resilient, Growthpoint, Hyprop which have exceeded the markets expectations in terms of their distribution growth so they’re still managing to grow their income. You have a yield and that yield typically grows by inflation or outpaces inflation.”