PIC keeping foreigners at bay

André Stadler, MD of Catalyst Fund Managers and one of the speakers at this year's IPD/Sapoa property investment conference, says the fact that large pension fund managers such as the PIC have developed an appetite for listed property is preventing foreign investors from taking up a large stake in the sector.

It's no secret that the PIC has in recent months upped its holdings in various property stocks, using dips in share prices as buying opportunities. The PIC recently upped its stake to around 20% in sector heavyweight Growthpoint Properties and owns around 30% of SA's second biggest listed fund, SA Corporate Real Estate Fund.

Patrick Sumner, head of property equities at international fund manager Henderson Global Investors, who also spoke at the conference, shares Stadler's view. He says SA institutions are "crowding out" any offshore capital that the sector could have attracted.

Sumner says the JSE's real estate sector is currently attracting less than 1% of global property investment despite offering far better returns than the US, Britain and European property stocks. London-listed property has lost 40% since the beginning of this year, while US property stocks are down 15% in the year to date. The SA listed property index is up around 30% over the same period