ALTHOUGH the Cape Town residential property market is cooling off, the same cannot be said for the commercial property sector, which includes offices, retail and industrial properties.
Listed property companies with large exposures in the Cape market are in good shape, and listed property loan stock company Atlas Properties is one of them.
With 70% of its property portfolio in Cape Town, the company, which delivered a 6,3% increase in distributions for the year to September, is looking forward to consistent growth in the future.
Atlas has indicated its portfolio will remain weighted in favour of the Cape, in anticipation of greater increases in value than in, say, Gauteng, due to the scarcity of land available for development and the consequential lower risk of oversupply. Johannesburg has much more land available for development, which raises the risk of oversupply.
Spearhead Property Holdings is another listed property company that has elected to have a Cape-dominated property portfolio. It has paid dividends, with Spearhead being one of the top-performing listed property funds.
Atlas has a similar record.
Atlas management is based in Cape Town, always a plus in managing a Cape-based portfolio.
Atlas's development pipeline seems plausible: it is planning to develop an industrial property site at Century City, a destination which has proved to be hugely popular with residents as well as businesses. The high demand for industrial and office space should prove profitable for Atlas.
