Local Reits beat UK property
Uncertainty over Brexit strategy batters UK-focused property stocks
UK-focused property stocks’ share prices were battered in 2016 and remain under pressure, given the continuing uncertainty regarding the UK’s proposed exit from the EU. This may present a buying opportunity assuming that prices will gain traction in 2017, but some analysts believe buying South African real estate investment trusts (Reits) is less risky and offers more value. The UK voted in favour of a Brexit on June 23, prompting the drastic fall in the share prices of various UK-based JSE-listed property stocks the following day. Since then prices have only marginally recovered. Shopping centre owner Intu Properties’ share price fell 2.67% to close at R46.23 on Monday. It lost about 36% of its value in 2016. This was despite Intu saying in October that it was on target to achieve growth in like-for-like net rental income in the range of 3% to 4% in 2016. Capital & Counties, owner of iconic London assets Covent Garden and Earls Court, saw its share price collapse 51.7% from R102.50...
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