Investec Property Fund sees office and retail regaining sparkle
Half of the firm’s 77 new leases are in the office and retail property market
SA’s office and retail property market is gaining a second wind after years of being unloved, according to Investec Property Fund.
Half of the firm’s 77 new leases signed with clients in the year through to end-March were in those sectors, creating an opportunity to dive back in after a period of disposals, co-CEO Andrew Wooler said in an interview.
The fund, which has real-estate investments of R22.1bn ($1.39bn) in SA and Europe, had previously spent 2021 selling retail assets to free up capital for higher demand segments such as warehousing and logistics, he said.
“The pivot in SA is now that everything is certainly stabilised, and it feels like it’s stabilised in our portfolios,” Wooler said.
Investec Property Fund may dispose of its 65% stake in a pan-European logistics portfolio as rising property values and falling rental yields create an exit opportunity.
“There’s opportunity to exit and crystallise significant value for shareholders and then recycle that capital,” Wooler said.
The fund reported an 11% jump in earnings in the year through to end-March, as vacancies more than halved. Property income advanced to R1.1bn, delivering a 34% return to shareholders. The fund expects net operating income to climb as much as 5% in the coming year.
Bloomberg News. More stories like this are available on bloomberg.com
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