Investments in these instruments have good hedge area

Investments in listed property instruments such as property trusts and loan stock companies during the past 18 months for many investors a good hedge against fluctuations field in other sectors of the Johannesburg Stock Exchange as the information technology sector. Indications are that the strong run at least another 12 months may continue, although both sectors in the last quarter somewhat erratic displayed. The opinion is expressed by Mr. Rob Van der Bos, property analyst at BoE Securities in the latest edition of Storeylines, periodic review of conditions in the property industry by the Ampros group published. He said the property’s instruments run since the economic crisis Asid about 18 months ago, mainly due to have a strong decline in interest rates on short-term.

Investment in listed property at that time a dividend yield of more than 20% earned, with the further prospect of further capital growth, which is an attractive alternative income option area. The regular income was also a good hedge against woelings at the fair that the share prices of small companies especially hard hit. Since then, the property trust index by about 77% improvement and property loan stock index by 63%. This means that the dividend yield to about 14% reduction, which is still an attractive income returns. Van der Bos says the recent fears that interest rates may soon may rise due to the weak rand and the crisis in Zimbabwe has confidence in the property sector slightly hurt, but he believes that since the uncertainties of the innocent is.

Now restore business confidence and the edge appear stable against the dollar, the fears that interest rates may rise, largely took the ward. He expects the listed property groups in the near future can benefit from substantial increases in rental income. He expects demand for space, especially industrial, may increase as the economic upswing momentum, but it may some time before enough new developments will be in increasing demand. Particular property portfolios now have a fairly high percentage of empty space, can apply to the upturn in demand benefit. Portefeujes on a large scale retail properties in the Western Cape and KwaZulu-Natal has been invested, however, can be under pressure because new mega-centers in the areas opened.