September 26 2024 16:30
SOUTH AFRICA
The South African listed property sector has rallied in 2024 off the back of improved confidence, interest rates coming off, the country’s government of national unity (GNU) managing to hold it together mostly and no loadshedding for some five months. The SAPY or J253 which includes the twenty stocks which best represent the sector returned 23.8% year-to-date on a total share price and dividend basis.
This is while bonds have achieved 12.4%, equities 11.5% and cash 5.6%. This is according to research by Anchor Stockbrokers.
Hyprop Investments and Growthpoint Properties were the top performers in August delivering total returns of 18.4% and 14.3% respectively. Delta Property Fund and MAS Plc were the worst performers with total returns of minus 18.8% and minus 5.1% respectively.
“The increase in South African listed property companies has been driven by a slow, but steady improvement in trading conditions, especially in certain retail sectors and industrial. In addition, sector performance has been aided by generally positive recent results and property trading statistics, an improved political climate from the GNU’s honeymoon period, and a general improvement in sector sentiment. There are also forward looking catalysts such as potential rate cuts, and the expectation of a short term economic boost from Two-Pot pension withdrawals,” said Garreth Elston, managing director of Golden Section Capital.
“Rate cuts will certainly assist in alleviating cost pressures on the sector, but will take a while to fully benefit companies, due to the high levels of fixed rates and hedges which will take some time to be replaced by lower cost loans and hedges. They will though benefit consumers, and therefore tenants, ideally resulting in better trading statistics further normalising listed property performance and improving profitability,” he said.
247@propertyflash.co.za
