Market volatility dampens listed property

Nick Wilson

Property Editor

GLOBAL market woes and local interest and inflation rates uncertainty continue to dampen the listed property sector, with the South African listed property index losing 4% last month.

Catalyst Property Fund Managers, which releases a monthly listed property report, said yesterday the performance of the sector had been “driven by the contagion effect of weak global markets, as well as the continued uncertainty regarding inflation and interest rate expectations domestically”.

These factors have caused volatility in listed property unit prices. Catalyst Fund Managers MD Andre Stadler said the length of time that the volatility would continue was dependent on how “the macroenvironment plays out”.

This volatility could affect corporate activity in the form of proposed mergers between listed property companies and funds, which have characterised the sector in recent months.

At the end of last month, 11 out of 25 listed counters were trading under cautionary announcements relating to merger and acquisition activity.

Catalyst said the most recent and largest of the potential mergers was the “proposed amalgamation” of Madison Property Fund Managers, Redefine Income Fund, ApexHi Properties and Hyprop Investments, which could create a company with a market capitalisation of about R24bn.

Acucap Properties has also indicated it would be keen to acquire listed property unit trust Sycom.

Other potential mergers on the horizon include those between Diversified Property Fund and Resilient Property Income Fund, as well between Pangbourne Properties, iFour Properties and Siyathenga Property Fund.