THABANG MOKOPANELE

Property Editor

THE property sector still faces a bleak year as a result of rising vacancies, companies reducing rental space and oversupply in the market, says Norbert Sasse, CEO of SA’s largest listed property group, Growthpoint Properties.

In an interview with Business Day on Friday, Sasse said the property market was unlikely to see any meaningful developments this year in the office, industrial and retail sectors. “There are likely to be isolated developments, like an industrial plant, but I doubt if there will be any major speculative developments this year. Until we start seeing positive economic figures, the property market will still be in for a tough year,” he said.

Asked whether the property market would not be caught off-guard when the economy recovered and there was suddenly huge demand for rental space, Sasse said even if that happened there was still enough supply in the market. “We must remember that the property market generally lags the economy by nine to 10 months. We are not likely to see the economy making any material impact in the sector until at least next year,” he said.

Sasse said although vacancies were still rising in the office, industrial and retail sectors, the good news was that the figures were still in single digits. “It is not as bad as previous years when vacancies were in double digits.” He said there were unlikely to be new developments until vacancies had been filled.

On the outlook for listed property companies’ distributions for this year, Sasse said shareholders would have to settle for single-digit distributions. “I think we have come to the end of double-digit distributions. Until the economy starts growing again, this year will see single digit distributions.”

Growthpoint, with assets exceeding R29,2bn and a market capitalisation of more than R20bn, plans to seek opportunities locally.

The group also plans to focus on Australia, where it has bought a 76,2% stake in an Australian Securities Exchange-listed property fund, rebranded as Growthpoint Properties Australia.

This email address is being protected from spambots. You need JavaScript enabled to view it.

GROWTHPOINT

Final20092008

Revenue (Rbn)3,4302,920

Pretax (Rbn) 1,6121,363

Net Income (Rbn)2,5972,184

Headline EP (c) 45,26159,31

Dividend PS (c) 114,60106,50

Source: Business Day