INVESTING: Dividend dryout becomes the norm in SA’s property market

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For many years, the dividend payout was well above consumer inflation, making property investments inflation-proof and lucrative. But those days are long gone, says Norbert Sasse, the group CEO of Growthpoint Properties, one of the largest real estate ...

Backing JSE-listed companies that own properties such as shopping malls, offices, warehouses and housingThe safety of property investments has been so ingrained in the psyche of investors that such investments came with their own idiom — “safe as houses”.

But those days are long gone, says Norbert Sasse, the group CEO of Growthpoint Properties, one of the largest real estate companies in South Africa. Sasse says it would be wishful thinking to expect such dividend payout ratios because the new norm is now payout ratios of below 100%. He told investors that Growthpoint will be at the 80% level in terms of the ratio for a while — “we certainly ain’t going to 100%”.

Although the government has substantially eased lockdown regulations , the property sector is still in a tough space. Growthpoint’s results show that the retail industry has staged a comeback from the Covid slump, with more consumers visiting shopping malls.

 

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