From the desk of Ian Anderson

Ian Anderson - Grindrod Asset Management. After a period of consolidation, during which time the number of listed property companies in South Africa dropped below 20, the sector has seen a surge in new listings during 2011. Investec Property Fund started the ball rolling in April and was quickly followed by Rebosis Property Fund, Vunani Property Investment Fund and Dipula Income Fund. Arrowhead Properties was listed last week after it was unbundled out of Redefine Properties and Synergy Income Fund is due to list later this week. Unfortunately the much-anticipated listing of Old Mutual’s high quality retail portfolio was scrapped earlier in the year. While the new listings represent only 5% of the total market capitalisation of the sector, they do present investors with an alternative to the very large, diversified property companies that have come to dominate the sector over the past 3 years. South Africa’s listed property market appears to be following trends observed in more mature public real estate markets like the United States and Australia, where smaller, more specialised funds emerged once the sector had gained acceptance from the investing public. Thanks to the efforts of the large, well-established property companies like Growthpoint Properties and Hyprop Investments, listed property has delivered outstanding returns to investors over the past 10 years and these returns have played their part in paving the way for these smaller companies to successfully list on the JSE Limited. At the same time, investor appetite for quality listed property investments enabled both Growthpoint and Hyprop to conclude significant property acquisitions in 2011, further enhancing the overall quality of their portfolios and setting the platform for strong income growth into the future. The current mix of industry heavyweights, with large, high quality, geographically diverse property portfolios and an emerging crop of more specialised property companies should entrench listed property as the property investment vehicle of choice across a broad spectrum of investors.