The JSE All Property Index closed at 9 718 last night.
SA’s listed property has outperformed bonds, equities and cash year-to-date and with interest rate cut expectations, the sector is likely to see further growth in earnings, higher retail spending, and share price up-side over time. In a global comparison, the local listed property sector outperformed other asset classes due to diversified portfolios whereas mostly specialised assets underperformed and delivered marginally positive returns of 2.9% in Rand terms, says independent property analyst Keillen Ndlovu. Year-to-date to July 2024, local listed property funds delivered 14.4% in returns (income and capital growth) compared to bonds (9.8%), equities (10%) and cash (4.9%) – recovering from being the worst performer delivering a negative 2.2% over the same period in 2023. There are currently 35 locally focused listed property stocks on the JSE of which 29 are REITs and six non-REITs.
Redefine Properties has pointed to improved levels of confidence in the commercial property sector with the demand for quality A- and P-Grade office assets having bolstered its occupancy rate to 87.8% for FY2024. Positive rental reversions in the retail space, with its portfolio’s sales and overall turnover surpassing pre-pandemic levels, also indicates that the industry has turned a corner and is about to enter a growth phase.
The Auditor-General of SA has identified deficiencies on 72% of the 75 infrastructure projects in its 2022/2023 Local Government Audit Report. Its findings indicate that, all too often, work on infrastructure projects is delayed, costing more than planned, and of poor quality. New infrastructure is not used as soon as it is ready and existing infrastructure continues to deteriorate because it is not property maintained/safeguarded. Only 34 (13%) municipalities received cleaned audits.
Stor-Age REIT has elected to adopt a 90% - 95% payout ratio of distributable income for FY2025. In June, the Group mentioned it was considering lowering its payout ratio, the first time since listing in 2015, given the high cost of capital. In its trading statement for the four months ended July 2024, it also reported a 2.3% increase in its SA portfolio’s occupancy, up by 8 100m2 year-on-year, to close at 91.4%. Its UK portfolio delivered a strong performance with occupancy in its owned portfolio increasing by 4.7% (up by 4 300m2 year-on-year). The REIT’s average rental rate also increased by 8.4% in SA and 1.9% in the UK, year-on-year.
40% of the Western Cape’s housing stock is valued at <R750 000 according to Lightstone with three out of four properties subsidised units including RDP and Breaking New Ground (BNG) housing, state-subsidised units, and old municipal stock. Properties valued between R250 000 and R750 000 account for 22% and affordable housing (valued under R250 000) 4%. Half the stock is concentrated in seven areas namely Cape Town (16%), Khayelitsha (9%), Mitchells Plain (8%), Blue Downs (8%), Gugulethu (6%), George (3%) and Strand (2%).
The Cape Grace has been awarded a Green Key certification, the only hotel in SA to currently hold this sustainability accolade. Through a third-party auditor, Green Key rigorously evaluates businesses and establishments based on the Foundation for Environmental Education’s strict criteria for their environmental responsibility and sustainable operation
