Evolution and Change are constants in our industry

Posted On Friday, 18 October 2019 11:50 Published by
Rate this item
(0 votes)

Property investment decisions are big decisions that need a proper landscape to provide direction.

Nkuli_Bogapa_MD_Broll_Investor_Services

Without that, it’s difficult to invest in this sector. Uncertainty is not good – yet, we’ve seen great volatility over the past two years with a depressed economy and significant geopolitical risks.

The property industry has been hardest hit. At Broll, we have managed to navigate this uncertainty alongside our investment clients. We’ve had to understand that decisions are taking much longer and that people are even holding back.

Our continued optimism hinges on the fact that, more and more, we are experiencing investors and even the general public telling government that we’ve had enough of empty policies and talk. We now need action. If our government takes the hint, we believe we’ll see positive energy begin to spiral into the broader economy and people will start putting both their money and their heads on the block. But, it’s early days.

Especially in this uncertain environment, yields are closely scrutinised by investors. A peek at the MSCI property index will show that returns remain positive and are in double digits which is promising.

We’re excited by the residential space which is currently one of the most evolutionary segments of the property market.

According to the property sector’s transformation charter, South Africa’s property sector is worth R5.8-trillion. Of which R3.9 trillion sits squarely in the residential segment. But the institutional investor has not paid too much attention to this until now. At the same time, the office segment is performing slowly.

We are now seeing true evolution as the industry has been able to res pond and say, okay, let’s do conversions and follow where the trends are leading.

This change has probably stemmed from government’s focus on human settlement and growing migration into our cities. With a historic shortfall in accommodation, there has always been a need. This has been an incentive for exploring and visualising solutions. Admittedly, some investors are evolving more slowly than others, but the shift has already started and we are seeing the conversion of previous office buildings into apartment buildings in Midrand and Rosebank in Johannesburg. This is a growing trend.

Industrial portfolios are also picking up. This is driven mainly by technology with institutional investors moving towards industrial and warehousing spaces because of the advent of online shopping. Although South Africa often lags behind other markets where this has been happening for some time, we are learning from them and definitely venturing in that direction

When it comes to retail, we are seeing the risk of large malls becoming big boxes as large retailers go out of business or downscale. Again, this is a learning curve and a continuing trend in the wake of online retail. Broll is well equipped to help investors and landlords to respond having learnt from our local and international markets. Recent visits to Europe and the U.S.A. have shown us that these can be opened to accommodate public services, including medical facilities.

In conclusion, as advisors to property investors, we need to spread the message that government can’t evolve alone. As the private sector, we have a significant role to play in working together with government to innovate and help our economy gain traction.

Last modified on Friday, 18 October 2019 12:16

Most Popular

Sectional Title Trustees and Homeowners Association directors face COVID-19 liability

May 22, 2020
Marina_Constas_BM_Law
The Covid-19 pandemic and South Africa’s lockdown regulations are impacting all aspects…

Deeds office reopen their doors to the public

May 09, 2020
Carlize Knoesen
The Department Agriculture, Land Reform and Rural Development has announced the reopening…

2020 Commercial Property Outlook –Why Property Price/Valuations Indices don’t tell the full story of market weakness during a deep recession

May 09, 2020
John LoosFNB
In a downturn, Property Market Values can deviate dramatically from the market…

Dipula drops vacancies by almost 30% and concludes R370m new leases for 29 Feb 2020 interim results

May 18, 2020
Izak_Petersen_mdos3o
South-African focused JSE-listed diversified REIT, Dipula Income Fund, today announced…

Development to bring residents closer to economic activities

May 19, 2020
Lindiwe Sisulu
Human Settlements, Water and Sanitation Minister, Lindiwe Sisulu, has declared 136…

Please publish modules in offcanvas position.