As we enter 2021, the world is collectively facing a second wave that threatens to upend what we previously experienced. We now have a range of new measures to combat this threat; however, new challenges have emerged as the world races to acquire and inoculate their populations on an unprecedented scale. The advent of the second wave, reintroduction of partial lockdown restrictions and uncertainty on the pace of the vaccine rollout is likely to weigh on domestic fundamentals.

Our forecasted forward funds available for distribution (FAD) is 10.86%. However, we are forecasting continued pressure on rental collections, higher vacancies, and elevated gearing positions to impact on the actual dividends declared.  We expect moderate growth off this low base taking lower GDP and lower short-term inflation forecasts into account, which has translated into lower market rental growth across most sub-sectors. Notwithstanding the rebound in the last quarter of 2020, our 5-year annualised total return forecast for the sector remains attractive and ranges between 14% and 17%.

RETURNS MATRIX ALPI

7.59% 7.84% 8.09% 8.34% 8.59%
-4.2% 13.9% 13.4% 12.8% 12.3% 11.8%
-3.2% 14.8% 14.3% 13.7% 13.2% 12.7%
-2.2% 15.8% 15.2% 14.6% 14.1% 13.6%
-1.2% 16.7% 16.1% 15.5% 15.0% 14.4%
-0.2% 17.5% 17.0% 16.4% 15.8% 15.3%
0.8% 18.4% 17.8% 17.3% 16.7% 16.2%
1.8% 19.3% 18.7% 18.2% 16.7% 16.2%

Source: Company data, Catalyst Fund Managers

Imdaad Nana

Investment Analyst, BBusSci

Imdaad Nana has 9 years of property experience.

Bénette van Wyk

Head of Distribution, CA (SA)

T: +27(0)21 657 5543
M: +27(0)84 678 1615
E: bénette@catalyst.co.za

Zayd Sulaiman

Portfolio Manager, CA (SA)

T: +27(0)21 657 5500
E: zayd@catalyst.co.za

Mvula Seroto

Portfolio Manager, CFA, CA (SA)

T: +27(0)11 778 6643
M: +27(0)82 421 0186
E: mvula@catalyst.co.za