Blog by Rode

Listed property has finally wiped out its undervalued status relative to directly-held property. This property class is now on average trading at a small premium relative to non-listed property, which should lead to more listings of directly-held property in the listed property sector.

Listed property fund managers are putting far too much effort into finding unavailable shopping centres in which to invest, while there are so many fair-priced office and industrial properties available, says Rode CEO Erwin Rode.

The notoriously difficult valuation of shopping centres may be at an end, thanks to a new valuation tool developed by Rode Valuations.

Despite a poor prognosis for rental (income) growth in the medium term, listed property still represents good value for property investors wanting a relatively secure income stream.

Own source Recently, strong criticism from Old Mutual Properties to Rode’s view on the state of the office market hit the headlines. Old Mutual Properties’ Ian Watt wrote in a letter to Rode’s Report that Rode’s figures are far too optimistic.

Rode’s Report on the SA Property Market 2002:2 South Africa’s non-residential property market is still in the doldrums, with the first quarter of 2002 witnessing a continuation of the market’s cyclical downswing.

The recent sharp rise in long-bond rates have pushed down property unit trust (PUT) prices, which makes it difficult for owners of directly-held property to list their portfolios on the JSE Securities Exchange SA (JSE) right now.

Houses in middle-priced suburbs are doing better than upper-priced suburbs – possibly because residents living in the upper-priced suburbs are doing less well owing to the economic slowdown.

Rode’s latest benchmarking Outgoings for Office Buildings, Outgoings for Industrial Buildings and Outgoings for Shopping Centres have just become available in electronic format.

Although the growing oversupply and rising vacancies are smothering office rentals, especially in the decentralised Johannesburg office nodes, the current healthy take-up of office space does not warrant the big alarm bells that have gone off.

Property unit trusts (PUTs) are now offering better value than six months ago as investors are dropping listed property to invest in rand-hedged investments, causing the property unit trust (PUT) yields to increase slightly, says Rode Report editor Dirk de Vynck.

Property unit trusts (PUTs) are now offering better value than six months ago as investors are dropping listed property to invest in rand-hedged investments. This has caused PUT income yields to increase significantly.

The listed property sector’s market capitalization is set for strong growth in the next two to three years as the market values of the listed and directly-held sectors have just converged.

Steady demand, stock shortages and the lowest interest rates continue to bode well for property as investment class – even to the extent of a continued outperformance of shares for the foreseeable future, says Peter Gilmour, regional director of RE/MAX Southern Africa.

South Africa’s only national residential rental company, Trafalgar, and its only residential research company, Rode & Associates, are at odds over what will happen to flat rents in the future.

Declining Central Witwatersrand real industrial stand values over the last decade paints a bleak economic picture – and indicates a distressing slowdown in the demand for vacant stands.

Doing a valuation is like doing research. The valuer has to support the crucial variables in his valuation model with empirical evidence and analysis that will stand up to scrutiny, says Erwin Rode, CEO of Rode & Associates.

Residential properties in the City of Cape Town will be valued for the current general valuation (GV) of houses in the Cape Metropole, by Americans, using a sophisticated computerised multivariate valuation technique known as CAMA (computer-assisted mass appraisal).

Profit expectations in the property industry are dropping in line with declining inflation expectations, says property economics and valuations firm Rode & Associates in its latest property state report.

State of the Property Market by Rode A dramatic turnaround in office rental rates nationally and excellent returns on property unit trusts are boding well for the industry, says property economists Rode & Associates in their third quarter State of the Property Market report.