In the last five years property has become the new 'currency' in South Africa.
According to Bill Rawson, Chairman of Rawson Properties, 'we have witnessed a massive increase in the number of units bought for investment rather than for use of owner-occupiers and we have seen a massive influx of small investors moving into industrial units, retail and office space. This is a development almost without precedent in South African business history.
'There are still, however, many people for whom the clerical work and supervision possibly required in property ownership are irksome and too time-consuming while others do not have the financial resources to buy property, but nevertheless want to be 'in' on SA property because they are confident that it is set for a further five years growth.
What should they do about it and where should they put their money?
Discussing this with a group of potential investors recently, Bill Rawson, Chairman of Rawson Properties, said that people of this type should consider seriously the JSE Securities Exchange listed companies which in the last five years have given returns way above the average for the exchange.
'Before it merged with the Redefine group, Spearhead Property Holdings saw its share rise from under R6 to above R30 '“ giving a 32% annual return for five years.
'Other loan stock companies like Growthpoint and Paramount had similarly good results,' said Rawson.
But will the loan stock companies continue to be good investments '“ will their profits still rise year-by year?
Groups like Redefine, said Rawson have the advantage of operating nationally and of being in all sectors of property '“ residential, retail, office and industrial. In addition, they have analysts who track the trends and swings keeping them one step ahead of the market in identifying and moving into the right categories of property and the right areas. This gives them an edge on other more general investment companies.
In recent years, said Rawson, companies like Redefine and Spearhead had 'to everyones surprise boldly entered the development field '“ and had proved particularly adept at it'.
'Add to this the fact that hey are generating good profits through development and you will understand the reasons for our faith in these companies,' said Rawson.
Projects like Convention Towers on the Cape Town Foreshore, the Knowledge Park extension at Century City, the upgrading of the Hyperama, the re-development of certain office parks at Wynberg, and the Greenfields development of a up-market industrial park at Montague Gardens had, he said, all been perfectly timed to take advantage of current trends.
'It is now evident that Redefine and others will continue to be developed nationwide and in the process (as long as current trends last), will contribute significantly to their profitability'
For all these reasons, said Rawson, buy into a good property listed company right now.
