Value in a Downturn

Value in a Downturn

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According to Alwyn van der Merwe, director of investments at Sanlam Private Investments, “Local investors, who have been on the receiving end of falling global property values in recent years, are now understandably somewhat hesitant about venturing back into this asset class. However, we do believe investors should seriously consider including some exposure to global listed property in their portfolios in 2013 as it has performed well recently, and we believe it will continue to do so,” he says.

“The investment outlook for global property is particularly attractive relative to global fixed interest assets. It’s an investment option that provides investors with exposure to the world’s best real estate in the best locations.

“Although the demand for space is generally sluggish, supply has been kept in check as speculative development remains muted. With an expected growth in earnings of 8% and an average dividend yield of 3,7%, global property is likely to offer double digit returns over the next twelve months,” Van der Merwe continues.

Assest drivers

“Slow global economic growth will continue to keep a lid on interest rates. In our view, 2013 will offer somewhat unexciting prospects for investment returns for both global and domestic cash and bonds and the fair valuation of global equities should translate into decent performance in global equities. Often investors want to distinguish between emerging market and developed market equities. Our view is that the boundary has become rather blurred and that the specific micro factors relating to a certain company are likely to drive the performance of assets within this universe.”

Eamonn Ryan
Before becoming a financial writer and freelance journalist in 1997, Eamonn Ryan was a legal adviser, company secretary and alternate director at listed company Cashbuild Limited from 1988 to 1997. Since becoming a financial writer, he has focused on the business and financial sectors, as well as personal finance, writing for Finweek, The Star Business Report, Sunday Times Business Times, Business Day, Mail & Guardian, Entrepreneur, Corporate Research Foundation (which brings out a series of books each year ranking SA’s best employers and best managers), as well as a host of once-off and annual publications such as ‘Enterprising Women’ and ‘Portfolio of Black Business’. He also writes media releases, inhouse magazines and sustainability or annual financial reports for various South African corporates and financial services groups, including the Ernst & Young annual M&A book.