Real Estate Investor Magazine South Africa September 2015 | Page 9

INVESTOR TALK
FROM THE PUBLISHER

I

n tougher economic conditions
it is always important to have
a rethink on your investment
strategy. Some of the major
considerations
are
anticipating
of governments tightening on
regulation environment as well as
ensuring that your assets are in a
jurisdiction that respects property
rights and have longer-term growth
prospects. Wikipedia says that asset
allocation is the implementation of
an investment strategy that attempts
to balance risk versus reward by
adjusting the percentage of each asset
in an investment portfolio according
to the investor’s risk tolerance, goals
and investment time frame. Now
is the time to start revisiting asset
allocation and not only to focus on
current income streams.
The annual Rode-REIM property
conference was a severe wake-up calls
for many local investors, businessman
and property professionals. The
economic situation both in SA

FROM THE EDITOR

Asset Allocation -

Time to revisit assets and not income streams
and the rest of the world is in a
very vulnerable position. Business
confidence is weak and all indications
are that we are facing a potential
global currency and economic crisis.
While on the face of it all sounds
like standard doom and gloom but
actually it is just another chance to
stand back, assess assets and take
calculated action. It is time to build
a powerful investment team and to
prepare for the opportunities.
The listed property sector will see
its excellent run slow down for the
first time in a decade. The best view
predictions for REITS are around
9% average returns, according to
advisor Dries du Toit, which is far off
from the double-digit 16% averages
before. Erwin Rode says that REITS
have traditionally performed well
because of positive debt leveraging
as a result of low interest rates where
strong market ratings allow funds to
buy portfolios at earnings enhancing
yields and the fact that 25% of their
portfolio is held offshore as a rand
hedge. Property is still outperforming
all other asset classes and remains
a prime asset class for the smart
investor going forward.
Rode’s residential capital growth
prediction in the medium term is for
below inflation rate for house prices.
Banks are still risk averse and hedging
their bets while the predictions for

W

elcome to the September
edition of the Real Estate
Investor Magazine, and
my first as editor. This publication
has, and continues to be the product
of a strong and passionate team
dedicated to providing both the
knowledge and the knowhow for
successful property investment.
As always, we welcome any and
all feedback from you as it provides
a clear indication of what you expect
form the magazine. Our ultimate

more interest rate rises of at least 2
basis points over the next 2 years is
almost a given. Office demand is in
decline as jobs reduce and Industrial
property is positive albeit around 4%
per annum as industrial properties
tend to be less speculative.
With some new initiatives you
can dramatically change your
circumstances by recruiting a likeminded team, consulting with each
other regularly and constantly
searching for new investment
opportunities. Philip Haslam author
of “When money destroys nations”
tells the story of many Zimbabweans
who lost all their wealth through
mismanagement of the government
printing money which caused
hyperinflation and total ruin for
many. When faced with disaster
we find ourselves with a number
of questions: Where do I place my
assets? How do I accumulate assets
that are recession proof, with debt
with strong fundamentals? These are
all great lessons to be learned.

Successful investing

NEALE PETERSEN

FOUNDER & PUBLISHER

goal is to share the best advice we
have to offer to empower you to
make solid financial decisions.
We hope you enjoy this edition
of Real Estate Investor Magazine
and the educational, topical and
inspirational content within. The
tips, tools and resources we have
compiled are aimed at helping both
start-up or seasoned investors grow
their wealth through property.
Enjoy the read

DREW HOOK

EDITOR

“When we replace a sense of service and gratitude with a sense of entitlement and
expectation, we quickly see the demise of our relationships, society, and economy.”
- STEVE MARABOLI, UNAPOLOGETICALLY YOU: REFLECTIONS =8