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Property Investment in South Africa

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19 April 2012. Through the ownership of their house, many people have relatively large exposure to the residential property market. If you already have a large concentration of exposure to property, you should exercise caution before investing in it (i.e. the higher your concentration of exposure to a sector, the stronger your view should be on its relative outperformance).

Ways of gaining exposure to property

Direct purchase of property (residential, commercial or industrial) & letting it out.

Investment in listed property.

Listed property

In South Africa you can purchase property loans stocks (PLSs) or Property Unit Trusts (PUTs).

PUTs have a compulsory seperate management company (Manco). There isn't a specific requirement for a seperate Manco for PLSs, but a couple of them do have seperate Mancos.

PLSs are funding by the purchase of securities called "linked units", that comprise of shares & debentures, in return for which investors receive dividend income (usually a very small part of total income) from the shares & interest income from the debentures.

For purposes of income tax calculations, the distributions from PLSs & PUTs are usually deemed to be interest (rather than dividends).

PLSs & PUTs which meet market capitalisation & liquidity requirements are listed in the South African Listed Property Index.

Listed properties on the JSE

Listed property on the JSE with their yield next to them (rounded to nearest%) on 18 April 2012.

Real Estate Holding & Developments

Real Estate Investment Trusts

Acucap

7

Invprop

4

Capital

7

Adrenna

0

Nepi

6

Capshop

4

Arrow A

1

Octodec

8

FPT

8

Arrow B

1

Orion

0

SA Corp

9

Bonatla

0

Premium

8

Sycom

7

Capco

1

Putprop

5

Emira

9

Dipula A

0

Rebosis

2

 

 

Dipula B

0

Redefine

8

 

 

Fairvest

10

Redefintl

9

 

 

FortressA

8

Resilient

6

 

 

FortressB

3

Synergy A

0

 

 

Growthpoint Properties

7

Synergy B

0

 

 

Hosp A

5

Tradeh

0

 

 

Hosp B

5

Vividend

9

 

 

Hyprop

7

VPIF

4

 

 

Ingenuity

0

Vukile

8

 

 

Pooled portfolios of listed property

Catalyst SA Property Equity Fund (A)

Coronation Property Equity Fund

Investec Property Equity Fund (A)

Marriott Property Equity Fund

Marriott Property Income Fund

Momentum Property Fund A

Nedgroup Investments Property Fund (managed by Grindrod Asset Management)

Old Mutual SA Quoted Property Fund (A)

Stanlib Property Income Fund (A)

Listed property Exchange Traded Funds

PROPXSAPY (SA Listed property Index). Issued by Fortress Asset Managers

PROPXTEN (ETF, Top Ten equally weighted listed property index). Issued by Fortress Asset Managers.

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