UK-based or exposed property stocks are providing strong returns for JSE investors despite the delayed Brexit process and uncertainty around it.
Industrial and logistics assets are enjoying good tenant demand, especially from companies involved in online shopping. South Africans can access numerous UK-based or exposed property companies.
Atlantic Leaf Properties, which invests only in the UK and in warehouses in secondary cities, and Equites Property Fund, which has exposure to top-end UK distribution centres, are performing well compared with other JSE-listed property funds. Atlantic Leaf’s share price is up about 10.6% year to date, while Equites’ share price has climbed nearly 33%.
Companies like Amazon and Wal-Mart need to store goods in high-quality distribution centres. More of these centres are being built in secondary cities outside London.
This is so that customers living across the UK can receive goods that they buy online more quickly.
Keillen Ndlovu, Stanlib’s head of listed property, said that UK property stocks could offer good value at current levels. Recent good performers were industrial and logistic stocks including LondonMetric, Shaftesbury and Segro, he said.
Outside of these industrial-focused property groups, South Africans can also invest in Covent Garden-owner Capital & Counties, retail tycoon Christo Wiese’s Tradehold, Redefine International, Intu Properties, New Frontier Properties, Capital & Regional and Stenprop.
One of the largest property stocks on the JSE, Hammerson, has managed to pull back some losses it made on its share price after the Brexit referendum in June 2016.
Year to date, the R75bn-sized owner of UK and West European shopping centres’ share price has fallen only 1.09%. Its share price closed 0.41% lower at R94.63 on Friday. Hammerson was trading at R89.30 a share on March 24.