Real Estate Investor Magazine South Africa July 2015

COVER STORY while fundamentals of property companies may be weakening in the current economic climate, they are still solid. Investors are welladvised to consider investing in smaller property funds that offer better yields. At the moment, the fundamentals in offshore commercial property are stronger and funding costs are lower. As a result, many analysts are now suggesting that global property exposure may offer better prospects. STRATEGY FOUR Offshore Listed Property z Investing in commercial property offshore gives investors access to global income streams and also provides a Rand hedge. There are a number of local listed property companies with substantial global property holdings. Most focus on Europe, particularly Germany and the UK. For example, Intu Properties’ portfolio features prime UK shopping malls. Redefine International has a focus on Germany and the UK but also owns properties in Switzerland, the Netherlands and Australia. The Investec Australia Property Fund offers exposure to the Australian property market. MAS Real Estate invests in property in Switzerland, Germany and the UK. A number of property companies 18 JULY 2015 SA Real Estate Investor listed on the JSE will provide local investors with focussed access to global commercial property portfolios, such as Capital & Countries Property PLC, with a portfolio of central London properties and Intu Properties PLC, one of the UK’s largest listed property companies, as well as New Europe Property Investments PLC “Investing in offshore commercial property gives investors access to global income streams and also provides a Rand hedge.” (NEPI) and Redefine International PLC. There are currently nine unit trust funds that are classified as global real estate funds. Listed companies invested in more ‘exotic’ markets, such as Eastern Europe, have been doing exceedingly well, delivering strong returns, such as Rockcastle Global Real Estate which invests in Poland and Zambia, and NEPI, which is Romania’s largest shopping centre owner, and has diversified into Serbian shopping centres. Investors can also explore options offered by investment fund managers focussed on global listed property, such as Reitway Global. For example, the Reitway BCI Global Property Fund, which has been approved by the South African Financial Services Board, offers a exposure to a portfolio of distribution-producing global real estate securities. The fund is a South African domiciled, randdenominated collective investment scheme investing in REITs and property-related securities via the asset swap mechanism. For a minimum R500 per month investment, it offers investors geographic, sector and currency diversification, moderate volatility and attractive yields. STRATEGY FIVE Crowdfunding A relatively new development, crowdfunded real estate investment allows many individual property investors to pool their funds and invest in a property investment opportunity or project. These investments are accessed via websites called CrowdFunding Portals (CFPs), of which there are many to explore. Three property crowdfunding models already offer investors further diversification beyond geographical diversification, by raising funds for specific buy-to-let property acquisitions, for property development and for individual mortgages or buy-to-let loans. Reputable CFPs combine relatively small investments from www.reimag.co.za

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