Property can play an important part in an attractive portfolio
Market has historically outperformed equity dividends and the trend is expected to continue
Property is one of the oldest investment alternatives. While its attractions are obvious — it produces a fairly consistent income stream linked to inflation and enjoys equity-like characteristics — it has only become a mainstream asset class in South African investment portfolios in the past 15 years. Seen as part of listed equity, property made up less than 1% of the market in 2002, partly due to its illiquidity, small capitalisation and a shortage of listed vehicles. Listed property accounts for nearly 7% of the FTSE/JSE Shareholder Weighted index nowadays, with more than 55 companies to choose from and a total market capitalisation of more than R650bn. It has emerged as an independent asset class worthy of inclusion in a balanced portfolio on its own merits. Property can be a fairly volatile asset class. In 2006 the FTSE/JSE Listed Property index fell 24% in two months; in October 2008 it fell 16% in a short period. More recently, the cabinet reshuffle has brought some uncertaint...
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