In 2014, discussions started around changing the composition of the SA listed property index (Sapy), driven partly by the fact that the index was increasingly comprising stocks with offshore earnings (albeit only those with a primary listing on the JSE). As such, the Sapy was no longer as representative of SA property funds as a decade ago. Proposed changes to the Sapy were also prompted by the weightings of Growthpoint Properties and Redefine Properties becoming potentially too large in the Sapy. The general view was that these two companies should be down-weighted but without up-weighting illiquid stocks in the Sapy.The index is likely to include 13 to 15 stocks, be Swix weighted and possibly capped at a weighting per stock of 10%-20%. Exchange traded funds (ETFs) and passive investors would probably prefer the tradable property index. We believe market expectation is for the Sapy to be morphed into either the tradable property index, or the all property index. The most likely out...

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