Invest in property unit trusts

Isaac Moledi

Isaac Moledi

One of the main tenets of careful investing is to spread risk through diversification.

Property Unit Trusts (Puts) is one of method to achieve this.

Craig Hallowes, the Association of Property Unit Trusts spokesman, says Puts offer an excellent way to spread risk in property investments.

So, for those people who are interested in investing in property, Hallowes advises that the six Puts currently listed on the JSE Limited offer the perfect diversification tool.

These unit trusts have a total exposure to 400 different properties and more than 8000 tenants.

Hallowes says: "For a private individual to acquire a spread of property investments in addition to owning a home, the entry costs can be prohibitive."

He says that Puts offer an alternative to direct ownership and represent an excellent way for investors to be exposed to a diversified investment in the property market, without the high capital requirement.

Each of the Puts offer investors a range of different buildings and properties, spread over different market sectors - retail, commercial and industrial - as well as being distributed geographically.

But they all have their own unique characteristics so investors who favour a particular segment of the property market or a specific region could select a Put that is tilted in that direction, Hallowes says.

He says the Capital Property Fund, for example, is moving from being a more balanced fund into one that specialises in offices and industrial space.

Each of the Puts own properties throughout the country but, as James Templeton, chief executive of the Emira Property Fund, says, investments are "diversified around the major metropolitan areas in South Africa", because that is where the economic activity is.

There is general consensus among the six fund managers that future growth is likely to come from the primary metropolitan areas in Gauteng, KwaZulu-Natal and Western Cape.