The outlook for the global economy for 2023 is still one of uncertainty, with economists warning of recessionary risks in the short term. In this uncertain environment, occupiers of physical real estate will generally remain hesitant to expand their premises or hire new employees, which places downside risk to the demand for space going forward. In the current environment, it is important to have exposure to companies with good quality portfolios, strong management teams and sustainable capital structures which will be able to adapt to the structural changes expected. We continue to assess the portfolio risks and actively screen for opportunities that market dynamics such as these are likely to offer.

Our rolled 1-year funds available for distribution (FAD) yield is circa 9.31%. The sector continues to trade at a significant discount to NAV with a material dispersion between SA centric companies at a discount to NAV of 31.8% and offshore companies trading at a discount of 17.3%. Although the uncertain macro environment will likely continue to drive elevated volatility in asset prices locally and abroad, we currently expect total returns of between 11% – 14% per annum over the next 5 years.