Local listed property (REITs) had a great 2024 and the locally listed ETFs followed suit. Since mid December 2024 they’ve been under pressure but we still have great twelve month returns and if we add in dividends received over the year, the returns are ±30%.
One Year Performance to close 29 January 2025
The three local property ETFs are all slightly different, especially the CSPROP* from 10X Investment that uses yield to determine weighting while the 1nvest ETFSAP and Satrix STXPRO* use the local property index, albeit Satrix caps the weighting.
Ultimately they all have the same stocks, just the weighting are different. TERs are;
- CSPROP ~ 0.45%
- STXPRO ~ 0.33%
- ETFSAP ~ 0.29%
But now what?
Well valuations are not expensive with the majority of locally listed REITs still trading at a discount to net asset value (NAV) which is my number one requirement for buying listed property. You want a discount, never pay a premium.
Yields are also still attractive in the high single or low double digit realm which is around what you’d get with money in the bank, but here you get the potential for capital appreciation as well.
For me personally I hold both CSPROP and STXPRO and mostly have them in my tax-free account as the dividends are taxed as income and this is the most tax efficient way to invest into REITs. I was also very early buying long before the 2024 run started. But the sector is not expensive and so I continue to hold and receive the dividend flow.
I will also be adding when the tax-free new year resets on 1 March and we can contribute another R36k not our tax-free accounts.
Property is a core holding for me in a portfolio and these ETFs are a great way to get that exposure.
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ETF blog
At Just One Lap, we are big fans of passive investment using ETFs. In this weekly blog, we discuss ETFs on the local market and the factors you need to consider when choosing an ETF. If you have wondered how one ETF differs from another, this is where you can find out. We explain which index each ETF tracks, what type of portfolio could benefit from holding each ETF, and how the costs will affect your bottom line.
