The offshore-focused property stocks from JSE are making more better the South African based property stocks certainly for the year to date.
The offshore-focused property stocks includes companies like Redefine International‚ Capital and Counties Properties (Capco)‚ New Europe Property Investments (Nepi) and Rockcastle Global Real Estate Company. This could be well understood from the statistics gathered from property analysts Catalyst Fund Managers. The global listed property and South African review details for September were released by catalyst on Thursday.
Looking at the Redefine International total rand return i.e. the income and capital growth for January to September end from the company was remarkable 64.86%, while that of Capco’s was 62.62%, Nepi was 44.72% and Rockcastle was 33.93% resp.
The total return of the South African listed property sector consisting of 30 stocks with a total capitalisation of R236.4bn, decreased while comparing the total return of only 7.33% year-to date which was taken back between May and August.
According to the report, the global listed property as followed by the USB Global Investors Index showed a return of 21.96%.
Among the big local losers founded reporting negative total returns were, Fountainhead Property Trust at 3.28% negative total return, Vividend Income Fund with a negative total return of 6.54%, Dipula Income Fund A and B units at 9% and 9.63% negative total return resp. and at last the new listing Tower Property Fund with 10.10%.
Lan Anderson the chief investment officer at Grindrod Asset Management said that the main reason with the money of the South African investors in the offshore property stocks was in advantage as the rand value had weakened at very low levels in 2013. Due to high bond yields, the property investments globally was under pressure.
The listed property yields and the bonds are tightly bound as they give both the income generating investments and investors assigned capital between them.
Mr. Anderson further added that “the issue of the weakened rand compared to the dollar has affected the investments done by South Africans in overseas property. As the property markets are under pressure at the global levels because of high bond yields so the investors are now selling out their property and buying government bonds. A weaker rand value just a safe period for the investors.”
Catalyst MD Andre Stadler gave his statement that the local property stocks had lost its strength this year as compared to 2012 when it was rather powerful. The global property market would remain under pressure due to high bond yields.
