EDITORIAL: Listed property sector’s loss of credibility
Analysts say the sector is about 15% overvalued while funds try to keep debt down
SA’s listed property sector is drowning in a sea of problems. The latest facing the R470bn sector is a loss of credibility, particularly about how listed funds value their properties.
One bank says the consensus among analysts is that the sector is about 15% overvalued, while many funds are trying to keep debt levels as measured by their loan to value (LTV) at below 40%. This suggests a fund with a LTV of 40% actually has a LTV of at least 50%. ..