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Listed Property in SA - towards a fuller understanding of performance and prospects Presentation by Brian Kantor SAPOA Conference | Cape Town | 11 th June 2014. Outline. An overview of extraordinarily good performance by SA assets including listed Real Estate

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Outline

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  1. Listed Property in SA - towards a fuller understanding of performance and prospectsPresentation by Brian KantorSAPOA Conference | Cape Town | 11th June 2014

  2. Outline • An overview of extraordinarily good performance by SA assets including listed Real Estate • Recent performance - property re-rates vsBonds • Performance explained fundamentally • A look at capital raising by the sector - why it is important for the economy and property developers - and what fund managers will be looking for from the listed property sector • A focus on initial yield - why it is less important than it seems • The outlook for the SA economy and interest rates

  3. R100 Invested Jan 1st 2004The Winner is Listed Property

  4. Performance post the GFC R100 Invested January 2009 - April 2014

  5. Total Returns 2013 Jan 1st 2004 to May 31st 2014

  6. Total Returns; June 1st 2013 to May 31st 2014

  7. JSE USD Values and Earnings; 1994 = 100

  8. JSE REAL FINDI 1994 = 100 - Prices catching up with earnings

  9. SA Property and Distributions; Jan 1st 2003 = 100A justified re-rating currently 15.7 times dividends

  10. SA Listed Real Estate; Market Value - A sector of growing importance

  11. Able to raise capitalBut much has gone abroad

  12. Much has gone offshore

  13. Following the money

  14. Does the sector offer diversification for fund managers?

  15. The Betas for the Property Sector. Bonds and EquitiesLess sensitive to both markets

  16. Initial Yields - All Shares vsSA Property

  17. JSE Property and All Share Indexes; Dividend Flows March 2002 = 100

  18. Growth in Dividends All Shares vsProperty

  19. Property vsAll Shares; Growth in dividendsProperty Dividends - About half as fast but a third as variable

  20. SA Property Dividend Flows and CPI 2003.12 = 100Beating Inflation - can it continue to do so

  21. Equity vsBonds vsProperty; Initial YieldsBonds>property>equity

  22. Equities Bonds and Property Yield Gaps

  23. SA property realised and required dividend growth

  24. Property and Inflation Linked YieldsIs property Inflation protected?

  25. The Real Yield Gap – Property less Inflation Linkers – is there an inflation adjusted return case for property?

  26. Nominal Returns: Property vsInflation Linkers

  27. Property vsInflation LinkersComparing Risk Adjusted Performance - the Sharp ratio is much superior for listed property

  28. Acucapvs Growth Point; Dividends and Dividend YieldSame growth - different yield

  29. Dividend Flows; ACP & GRT vsIndex 2003=100

  30. Initial Dividend Yield and subsequent relative performanceThe DY relative to the index DY at each time point and compares it to the subsequent 12m return relative to the index. There is no link.

  31. SA Risk Premium Daily Data to June 6th 2014

  32. RSA and USA Long Bond Yields

  33. Yield Spread and ZAR; Daily Data 2014

  34. RSA Sovereign Risk premium

  35. Boston Consulting Group applied to Return on Capital

  36. Applying Holt Analytics to SA Property

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