Listed property the best performing asset class of 2015

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"Despite a tough operating environment and the brutal turmoil that hit local markets in December, the SA REIT sector continued its excellent track record of outperformance for investors in 2015," says SA REIT Association chairman, Laurence Rapp.

While being the best performing asset class of 2015, listed property's returns were somewhat lower than in recent years after it took a nasty knock in December, with other sectors, as capital markets responded to what has been coined 'Nenegate'.

As the market was rocked by the news, listed property dropped around 10% in two days. It later recovered to some extent. Despite these gains, in December listed property still lost 6.12%. Before then, listed property wasn't only leading other asset classes, but also outperforming market expectations.

New markets

Rapp notes that while the limp local economy will put all sectors under pressure in 2016, the listed property sector is already ahead in its quest to find greater value for investors by entering new markets and sub-sectors. "International and sectoral diversification has been a growing trend in the sector for some years now, and certainly dominated strategies in 2015," says Rapp.

This focus is likely to continue in 2016. "Given the stagnant economy, weakened rand and further threats of a credit downgrade, the sector will work hard to sustain value in local markets while also looking for offshore assets with more attractive fundamentals and rand hedge benefits. However, property is a long-term game, so REITs favour taking a corresponding long view when making investments. It is this approach that has sustained the sector's performance in tough times."

In its pursuit to continue its outperformance, remain attractive to investors locally and internationally, and to grow despite tough times, the sector will come together for the SA REIT Conference 2016 on 17 March.

Business trailblazer

The conference's headline speaker is internationally acclaimed business trailblazer and ex-CEO of global property giant Unibail-Radamco, Guillaume Poitrinal. It is his first time speaking in South Africa. Poitrinal will be joined by outspoken international keynote speaker Andrew Parsons, MD of Resolution Capital in Australia.

"This conference couldn't happen at a better time," says Mark Stevens, chairman of the SA REIT marketing committee. "We've started the year on an uneasy footing with yet another set of economic hurdles. This is the ideal opportunity to come together, hash out challenges and learn from Poitrinal, one of the world's best business leaders."