South Africa: In African Listed Property, Size Doesn't Matter - but Stability Does


African markets have begun to dip their toes into the Real Estate Investment Trusts (Reits) pool. It is still a very small pool, but a significant step none the less. Some countries are still trying to find their footing, but there are others who have kept their heads above water. But experts say it is going to take some time before everybody learns how to swim.

The local listed property story made a big splash when the regulators consolidated property unit trusts and property loan stocks into one simple and tax-tight investment vehicle named a Real Estate Investment Trust (Reit). And investors rode the wave of double-digit capital growth rates and inflation-beating income distributions for many years.

But in 2018 the tide went out, taking 25% of the JSE's South African Listed Property Index's value with it. It is yet to return, as a sluggish economy keeps a recovery at bay. There are simply too many buildings and not enough tenants.

Meanwhile, investors and the property counters themselves have gone searching for greener pastures in places far, far away -- in Europe, the US and parts of Asia to be exact.

In future, they might not have to travel as...

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