Moody's reported on Wednesday that it has changed its outlook for South African commercial mortgage-backed securities (CMBS) commercial property loan collateral to negative from stable/negative.

In their EMEA CMBS 2008 Review & 2009 Outlook the rating agency said that commercial property values in South Africa have started to soften in 2008 due to yield widening and reduced investment activity.

"Yields are expected to increase throughout 2009, while nominal rental values are expected to remain fairly stable during the year," said Moody's.

A further slowdown of the South African economy and deterioration of consumer and business sentiment will have an adverse impact on the already declining property investment market.

"However, due to low vacancies and a shortage of new developments, commercial property occupational markets (in particular office and industrial) are expected to remain overall stable," concluded Moody's.

Source: I-Net Bridge