Property investment sector delivers 11.7%, IPD index shows
New York-listed MSCI has released the IPD SA Annual Property Index, which showed that the South African property investment sector delivered an ungeared total return of 11.7% in 2017, up from 10.9% in 2016. This index has outperformed the MSCI SA Equities Index and the JPMorgan seven-and 10-year bond indices over three-, five-and 10-year periods. The index, which is sponsored by Nedbank CIB, is based on asset-level data collected from a sample of 1,649 properties with a total capital value of R356bn. This represents about two-thirds of professionally managed investment property in the country. The 80 basis point improvement in the 2017 numbers was driven by capital growth of 3.2% compared with 2.3% in 2016, as a result of positive contributions from both base-rental growth and a strengthening base-rental yield, according to MSCI executive director Phil Barttram. The income return was down by a marginal 20 basis points to 8.3% as the market experienced yield compression through the y...
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