A collection of Futuregrowth thought leadership pieces, media articles and interviews.

Community Property Fund outperforms listed property

22 Feb 2016



SA’s Listed property sector returned -2.42 percent for the 12 month period ending January, whereas Futuregrowth Asset Management's Community Property Fund returned 17.91 percent for the same 12 month period.


"December was turmoil for the markets in general and listed property and bonds in particular" says Smital Rambhai, product manager of Futuregrowth's Community Property Fund. "Being unlisted, our fund was not exposed to the same level of volatility”.

"There isn't much that can be done about macroeconomic trends and political influences, but by doing the fundamental tasks of managing a property portfolio well, we were able to achieve better-than-average returns for investors”.

Rambhai says there were a number of key drivers behind the improved total returns: "We significantly reduced vacancies across our shopping centres, put longer-term leases in place, and attracted better quality tenants. We also improved operational efficiencies and optimised cash usage in the fund.

"We've come a long way in the last 20 years. In 1996, when the fund was launched, the banking sector was not interested in financing township shopping centres and they were a no-go zone for developers. Things have changed since then, and the fund continues to reap the benefits for its retirement fund investors by being among the first to invest in the township sector."

He says it's clear that this year is going to be tough, and possibilities of a recession loom yet again.

"Interest rate increases and the threat of a sovereign credit downgrade add to the somber mood. The properties in this fund might see some of this decline in economic activity, but because they cater for the essential needs of the communities they serve, we believe they are likely to be less affected overall.

"People will always need to buy food, clothing and household items and have access to key services. Our shopping centres cater for these basic needs, and because they are conveniently located close to transport nodes, consumers are likely to continue spending their time and money here.

"Demand for rental space in our centres is strong, and we are planning to expand some of our centres due to this strong demand from tenants." Community Property Fund outperforms listed property in South Africa December was turmoil for the markets in general.

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