The fund delivered a total return of 22.7% for the 9 months ending September 2014, outperforming both the index and the median manager, by 8.7% and 9.1% respectively.
The listed property sector returned a respectable 14% for the 9 months ending September 2014 despite the poor domestic economic environment, which continues to be plagued by labour unrest, slowing economic growth and rising inflation. Relative to the other listed asset classes over the same period, property outperformed bonds (5.7%) cash (4.3%) and equities (9.4%). Over a longer period, property has also proven to be one of the best asset classes, returning 22.7% p.a. over the last 10 years, beating the returns on equities of 18.8% p.a., bonds of 8.9% p.a. and cash of 7.4% p.a.
South Africa currently faces an environment of tepid growth, coupled with rising inflation. This puts the SA Reserve Bank in the invidious position of needing to raise interest rates without further derailing economic growth, a tough balancing act. Having raised the repo rate by 50 basis points at its January meeting and passing a hike at the next two meetings, the higher than expected inflation data and weaker currency may force the SARB to raise rates again. Although rising interest rates do have a negative impact on property values, the current rate cycle is likely to be a shallow one, which should limit the likely decline in capital values. Mitigating this, however, are the expected benefits that should emerge from the bout of restructuring and consolidation currently taking place in the sector.
At the end of September 2014, the listed property sector traded on an historic yield of 6.6% and a projected forward yield of 7.2%. The sector is expected to deliver between 8% and 9% growth over the next few years, still making listed property one of the more attractive asset classes.

The fund delivered a total return of 7.9% for the first half of 2014, outperforming both the index and the median manager, by 1.5% and 2.0% respectively.

The listed property sector returned a respectable 6.3% in the first half of 2014 despite the poor domestic economic environment, which continues to be plagued by labour unrest, slowing economic growth and rising inflation. Relative to other listed asset classes over the same period, property outperformed both bonds (3.4%) and cash (2.8%) but lagged equities (11.8%). Over a longer period, however, property has proven to be one of the best asset classes, returning 23.2% p.a. over the last 10 years, beating the returns on equities of 21.0% p.a., bonds of 9.4% p.a. and cash of 7.5% p.a.

South Africa currently faces an environment of tepid growth, coupled with rising inflation. This puts the SA Reserve Bank in the invidious position of needing to raise interest rates without further derailing economic growth, a tough balancing act. Having raised the repo rate by 50 basis points at its January meeting and passing a hike at the next two meetings, the higher than expected inflation data released for May is likely to force the SARB to raise rates again at its July meeting. Although rising interest rates do have a negative impact on property values, the current rate cycle is likely to be a shallow one, which should limit the likely decline in capital values. Mitigating this, however, are the expected benefits that should emerge from the bout of restructuring and consolidation currently taking place in the sector.

At the end of June 2014, the listed property sector traded on an historic yield of 6.8% and a projected forward yield of 7.4%. The sector is expected to deliver between 8% and 9% growth over the next few years, still making listed property one of the more attractive asset classes.

The Listed Property sector continued its strong performance through the first four months of 2013 rising by 17.2%. The sector however gave back of most of its return in May after the U.S. fed hinted to the market that they may begin tapering their asset purchases. With markets participants having to adjust their expectations to reflect the removal of these ex-traordinary monetary policy accommodation measures, and with the spectre of higher interest rates in the developed world, Emerging market sovereign bonds, corporate bonds, currencies and listed property were sold off. On the back of this we saw SA listed property continue its sell off through the rest of 2013. After reporting a total return of 17.2% up to the end of April 2013 and the subsequent sell off between May and December, SA listed property still managed to deliver an inflation beating return of 8.4% for the year outperforming both cash(5.2%) and bonds(0.6%).

The sell-off in the listed property sector on the back of the rising bond yields has created an opportunity to build up hold-ings in highly rated stocks that usually appear expensive on a yield relative basis but have strong distribution growth op-portunities.

As at the end of the 2013, the historic yield on SA listed property sector was 6.8% and 7.5% on a forward yield ba-sis. The sector is expected to deliver between 7% to 9% growth over the next few years, making listed property still one of the best asset classes to be exposed to over the long term.

We continue to position the fund in the short term to minimise the volatility emanating from the uncertain U.S. Monetary and fiscal situation.