1nvest SA Property ETF

Simon Brown ETF Blog, Latest

The 1Nvest SA Property Index (STPROP) ETF tracks the FTSE/JSE SA Listed Property Index (REITs). This index tracks the performance of the country’s 20 biggest property companies. This index is weighted by market capitalisation

It has been a tough pandemic for local property stocks but we are starting to see some green shoots and property always deserves a space in a diverse portfolio.

Companies that specialise in office space rentals, especially in upmarket areas, might struggle with occupancy during challenging economic times. Similarly, businesses in malls could fail and close down as consumer spending slows, affecting property investment companies in the retail space. The annual lease escalation most property companies implement might also be up for negotiation in a difficult market. It is important to note that the majority of the companies represented in this index operate in the retail, office and industrial sectors.

Investors can expect a quarterly dividend payout, making this a great choice for income investors. It is important to note that income from property investments are not taxed at the usual 20% dividend withholding rate, but rather at an individual’s income tax rate. Income from this ETF could therefore potentially push investors into a higher tax bracket. Tax-free investment accounts are ideal vehicles to circumvent the tax issue. 

The top ten holdings at the end of June 2021

  • Growthpoint Properties Ltd ~ 20.66%
  • NEPI Rockcastle PLC ~ 17.85%
  • Redefine Properties Ltd ~ 9.57%
  • Resilient REIT Ltd ~ 6.96%
  • Fortress REIT Ltd A ~ 6.64%
  • Equities Property Fund Ltd ~ 4.27%
  • Vukile Property Fund Ltd ~ 4.19%
  • MAS Real Estate Inc ~ 3.39%
  • Hyprop Investments Ltd ~ 3.21%
  • Sirius Real Estate Ltd ~ 2.75%

It’s worth noting that a number of these REITs are operating outside of South Africa. Nepi Rockcastle, MAS Real Estate are in Central and Eastern Europe while Sirius is predominantly in Germany.

ETF name 1Nvest SA Property ETF
ETF issuer 1Nvest
Issue date 13 February 2013
ETF TIC* 0.31%
ETF benchmark FTSE/JSE Africa SA Listed Property Index
Tax-free savings account Investment allowed
Market cap* R1.04billion
Dividends*  4.5%
What we like Easy-to-use local property exposure

*September 2021

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