It’s been a year to forget for SA’s listed property sector, and we’re only through half of it.
As few as three listed property companies achieved double digit total returns, including share price growth and dividend pay-outs, between January and June.
These were Australian office owner, Irongate, which was formerly known as Investec Australia Property Fund with 13%, logistics specialist Fortress’ B shares with 9% and diversified Vukile Property Fund with 8%, according to research by investment bank, Stanlib.
Bear in mind that FTSE/JSE SA Listed Property index or Sapy, which includes the 20 largest and most liquid property stocks, returned 30% in 2021 as it recovered from the worst of the pandemic in 2020.
However, 2022 has proved to be apocalyptic for many listed investments in SA and abroad. Listed property hasn’t been helped by the fact that consumers have battled with rising living costs, including food and fuel.
Research by Anchor Stockbrokers showed that the property sector was down 12.7% year-to-date at the end of June, while bonds had lost 1.94% and equities had lost 8.30%. Cash had meanwhile climbed 2.19%.
Head of listed property funds at Stanlib, Nesi Chetty, said the next best performers for the first half of 2022, after Vukile, were diversified asset owner Emira Property Fund and retail group Resilient, both with a 0% total return. MAS Real Estate and Storage Property Reit suffered -3% and -5% returns respectively. These two stocks however may be well-placed to recover strongly by the middle of 2023.
MAS owns shopping centres and offices in Romania while Storage Property is the largest and most sophisticated personal storage provider in South Africa.
The worst performers were Sirius Real Estate, a German and British business park owner and Hammerson plc, one of London’s largest mall owners. Both companies have been hurt about uncertainty around the war in Ukraine and if and how it could spill over into western Europe.
Picture of Nesi Chetty supplied by Stanlib