Strong demand for middle-income rental housing is prompting private entrepreneurs to build residential property portfolios that they can list when economic and market conditions improve and fund managers become less wary of risking new money in the listed property sector. A residential-only fund may list as early as next year, according to analysts, who say that some funds have been able to get scale relatively quickly compared with other property types. Such a fund would become the fourth residential-focused fund on the JSE, following on from Indluplace Properties, which has about R4.5-billion worth of rental flats; Transcend, which owns R1.2-billion worth of flats; and Balwin, which develops and sells sectional-title housing. There is a disconnect between developers who see housing demand on the ground and fund managers who put their money into listed property companies and try to diversify against risk. Some fund managers say residential property has historically been perceived a...

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