Western Cape real-estate veteran Mike Flax and his understudy, Quintin Rossi, are banking on "semigration" across wealth brackets into the province to drive their latest property fund.

The pair say their company, Spear, may be able to deliver sector-beating dividend growth because of this growing trend.

Semigration involves people moving from other parts of SA, particularly Gauteng, to the Cape in search of work and a different lifestyle.

Spear, the only regionally specialised property fund, was set to grow its dividend 9%-11% a year for the next two years because of its ability to buy well in the province, said Flax on Thursday after the release of financial results for the year to February.

Other South African real estate investment trusts grew their dividends 3%-5% on average this reporting season.

Spear’s results were the group’s first complete financial year since the company was listed in November 2016.

The company’s assets under ownership increased 117% during the 2018 financial year while the group also exceeded dividend expectations by 1.95%, declaring a final dividend of 78.50c per share.

Flax, who founded Spear, also announced he would make way for Rossi, who he had groomed to become the next head of the company.

Flax is set to become executive deputy chairman, focusing on strategic growth plans for Spear’s development pipeline and unlocking value.

"We believe the Western Cape is a very attractive investment destination and that we have an edge over our competition because we have long-standing relationships in the province," said Rossi.

"We are finding that semigration is across wealth groups and it isn’t just retirees. People are attracted to the province because it has more consistent service delivery than other provinces," he said.

"People want to work in places like Somerset West, Brackenfell and Parklands, and as a result demand is building for new offices and residential in these areas. So even though Cape Town’s land is limited, there is a lot of demand beyond the expensive Atlantic seaboard," said Rossi.

Rael Colley, a real estate analyst at Anchor Stockbrokers, said Spear’s results exceeded his team’s expectations. "Their tangible net asset value per share showed robust growth over the reporting period, increasing 10.3% over the last six months. A low portfolio vacancy of 1.95% indicates healthy demand for space in the overall portfolio."