Slumming it: Time to buy into beaten-down listed property?
The market seems to have stabilised following the massive selloff of the Resilient group of companies
Is investor sentiment in the battered listed property sector finally on the mend?
There’s probably still some way to go but it appears that property punters are returning to the market to cash in on cheap buying opportunities.
The SA Property Index (Sapy) was up more than 2% over the past week, bringing the total gains since the index hit a three-year low on April 4 to 7.2%.Granted, the Sapy is still down around 16% from the end of 2017, when it reached a high of 691 points. But the market seems to have stabilised following the massive sell-down of the Resilient group of companies, which was triggered by allegations of insider-related trading and concerns about its cross-holding structure and BEE scheme. The index was further dragged down by a stronger rand, which has put pressure on the share prices of some offshore property counters.
April’s rebound has been supported by UK and European mall owner Hammerson, which rallied 13% last week after withdrawing its support for a merger with UK mall owner Intu Properties. In addition, the Resilient group’s four associated companies — Resilient Reit, Fortress Reit B, Nepi Rockcastle and Greenbay — have recovered between 18% and 34%.
That follows the release of the findings of former auditor general Shauket Fakie clearing Resilient executives of any wrongdoing, as well as steps announced to unbundle its cross-holdings and restructure its BEE scheme.
The market still awaits the outcome of the probe of the Financial Sector Conduct Authority into alleged insider trading and false and misleading reporting about the group. Year-to-date the four Resilient stocks are still down between 35% and 60%.