Property investment 'more than just about profit'

Carin Smith

Cape Town - The value of a property investment does not only lie in the return on investment, but also in its sustainability, according to Stan Garrun, executive director of MSCI, a US-based provider of equity.

"Investing in property is about extracting value from the wide range of products available - from listed options to index funds," Garrun told Fin24 at the Investment Property Databank (IPD) SA Property Investment Conference, which took place at the Table Bay Hotel in Cape Town.

"Some property funds have, however, been criticised for not bringing in responsibility in the investment process. The search for value must, therefore, be a bigger term than just being about profit."

He pointed out that the sustainability of a building in terms of the environment and with regard to long term investing was a second factor relating to the ultimate value of such an investment.

Energy efficient buildings outperform other financially similar investments and according to Garrun "the whole efficiency and moral imperative is now also becoming a financial one as well".

"Property is a good investment via listed funds and becoming more so as there are so many solutions. It makes it easy to get in and out of investments," explained Garrun.

"Listed funds are easily accessed and the South African property sector offers good returns. Some say the returns will not be as good in the future as in the past, but there are still good returns and better than in many other countries."

According to Brian Wilkinson, CEO of the Green Building Council of South Africa (GBCSA), there were only six buildings in SA with GBCSA green building certification four years ago. Today there are 122 such certified buildings representing 2 million square meters of green space in total.

Fin24 Source