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Fund managers push for SA reits to go overseas

Johannesburg – Those who claim the South African reits (real estate investment trusts) market is over-valued, do not appreciate the changes which have happened in this sector, according to Ian Anderson, chief investment officer of Grindrod Asset Management.

At the same time he expects an increase in focus of SA reits on allocation to markets outside South Africa.

This is because of worries some fund managers have about the SA property market and accordingly they are pushing for SA reits to “go overseas”.

In a panel discussion led by Anderson, at the annual convention of the SA Property Owners Association (Sapoa), Vukile Property Fund CEO Laurence Rapp, said in his view the reit model in SA is “superb”.

“It is important to have a strategy on how to find the right market, the right partners and a complementary skills-set to build a sustainable portfolio,” said Rapp.

“Be aware of international happenings and also of what our SA investor base wants. For instance, is there perhaps a move away from emerging markets? At the same time we see reits rising in the US.”

To this Anderson added that those SA investors who just want to “get offshore” could see property as a relatively safe way of achieving that goal.

Another member on the panel was Bronwyn Corbett, chief operating officer and chief investment officer of Delta Property Fund. She still sees lots of growth potential in the rest of Africa.

“South African investors are often fearful of the rest of Africa, yet we find a huge amount of interest among international investors in African property. I see lots of value in many African countries,” she explained.

“We are absolutely focused on Africa. On the other hand, if you do not approach Africa correctly it will eat you alive. You cannot, for instance treat all other African countries like you do SA. While you cannot get your money out of Angola at the moment, Egypt, on the other hand, is becoming the latest buzz word.”

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