BUSINESS MAVERICK: Once bulletproof, listed property stocks are floundering

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BUSINESS MAVERICK: Once bulletproof, listed property stocks are floundering By Ray Mahlaka

For many years, South Africa’s listed property stocks consistently rewarded investors with attractive and inflation-beating dividend growth.

Dividend growth of 4%, which is in line with inflation, is now the expectation as low economic growth and poor business and consumer confidence continue to erode the profits of property companies. Both are operating in an environment that faces an oversupply of office and retail space, and fewer businesses that are renewing their leases for longer periods and at higher rental rates. This is starting to reflect in their dividend growth forecasts for 2019.Business Maverick’s

Underscoring this is the performance of Redefine’s R72.9-billion property portfolio of retail, office and industrial properties that are based in South Africa. Its flagship properties include Blue Route Mall in the Western Cape, and Centurion Mall and East Rand Mall in Gauteng.Redefine’s rentals across all subsectors of the market recorded negative reversions on lease renewals for the six months to February 2019.

 

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