According to Catalyst Fund Managers, the SA Listed Property Index (J253) recorded a positive return of 2.18% in September 2014.
The yield to maturity (YTM) on the Long Term Government Bond Index ended the month at 8.22% (7.98 % – 31 August 2014). The SA listed property historic yield ended the month at 6.83% (6.84% – 31 August 2014). The SA listed property sector historic rolled yield was trading at a premium spread of 1.39% to the Long term Government Bond yield to maturity at 30 September 2014 (vs. 1.14% at the end of August 2014). SA Listed property recorded the highest total return (2.18%) of the four traditional asset classes in September 2014. SA Cash (0.52%) and SA Bonds (-1.57%) were the next best performing asset classes for the month.
For the last 12 months SA Equity remains the asset class that has recorded the highest total return (15.44%), followed by SA Listed Property (15.13%), SA Bonds (5.79%) and SA Cash (5.64%).
The major corporate action that occurred during the month was the takeover of Premium by Octodec which was given the green light after the Competition Tribunal approved the transaction.
Property fundamentals remain challenging in the direct real estate environment. Capital markets remain volatile and managing interest rate risk for listed property companies will be high on the agenda. Despite this, listed real estate companies are likely to continue to deliver inflation type income distribution growth over the next 12 months.