Cracks start to show
Property investors in for a dividend shock
Investors should brace themselves for lower dividend growth — but total returns may yet surprise on the upside
Property investors who expect to see their annual dividend payouts increasing by the usual 8%-12% may be in for a rude awakening. For the first time in years, property funds that have built up portfolios of SA shopping centres, offices and industrial premises are starting to report flat or even negative dividend growth. Last week it was the turn of Tower Property Fund, which reported a 16% drop in dividends for the 12 months to June. Next week Emira Property Fund is expected to report a 2.6% fall for the same period. Meanwhile, Accelerate Property Fund recently warned that its dividend growth would be flat for the next two years. Delta Property Fund also expects zero dividend growth for its 2018 financial year, down from a previous forecast of around 5% growth.Keillen Ndlovu, Stanlib’s head of listed property, says most local property companies have already made yield-enhancing acquisitions in overseas markets, which will prop up earnings. "Debt levels are reasonable too," he says. ...
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