Real Estate Investor Magazine South Africa August 2015 | Page 51

• How much liquidity do the shares offer, ie how
easy is it to trade in and out of the shares?
• What level of foreign currency exposure does the
fund offer? Given the weak rand, foreign currency
exposure could yield significant benefits in the
current market.
• What is the fund’s tenant exposure? Who are the
fund’s tenants and how exposed is the fund to
individual tenants?
• What is the concentration of assets within the
fund? Are the assets diversified or are there only a
limited number of assets?
• When and how does the fund pay out distributions?
Long-term perspective
Investors should not underestimate the importance of
a long-term perspective when investing in property. In
order to correctly assess the performance of an asset
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class and to understand the true nature thereof, investors
need to look at the 1, 3, 5 and 10-year performance.
Five years is generally the minimum period you are
encouraged to hold shares in order to reap the full
benefits. The returns achieved over 10 years as shown
in the graph below shows a very different picture than
the three month performance graph.
The returns of 38% the listed property sector
delivered for the 12 months to April should not be
considered the norm. However, many analysts expect
listed property to deliver an average total return of
8–12% over the next year, while investors with a longterm investment horizon of at least five years can still
look forward to returns of 10-12%.

RESOURCES
Periscopic Masingita
AUGUST 2015 SA Real Estate Investor

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