Retail, office property remain sound investments

Posted On Monday, 29 September 2003 02:00 Published by
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Retail and office property - especially in areas with high-income demographics - remains a sound investment for entrepreneurs.

Retail and office property - especially in areas with high-income demographics - remains a sound investment for entrepreneurs.

"On the retail front, growth in consumer spending remains positive," says Jo Schwenke, MD of Business Partners, a specialist investment group for small and medium enterprises. "This not only bodes well for overall economic growth in the short- to medium-term, but also for retail sales.

"Office parks too remain a solid investment as consortia of entrepreneurs look to develop custom-built premises for own use, or to invest in exclusive park developments."

Schwenke says the property market has been given a solid boost by the recent interest rate cuts, which have made property a more attractive investment, as well as improving the overall levels of confidence in the economy.

"Retail property and office park developments are best suited to two types of entrepreneurs. Firstly, those who need premises for own use and, secondly, those who have identified property as a desirable addition to their investment portfolios."

Stable retail spending is an important factor when considering retail property as an investment. Overall sales growth, as measured by Standard Bank, shows a stable annual increase in retail spending of around 2,2%. This may be attributed to the combined effects of salary increases and of cuts in income tax rates, which have boosted consumer expenditure, keeping growth consistent.

In line with this, retail and office rentals are keeping pace with or exceeding inflation, ensuring that property remains a secure investment for entrepreneurs. - The Star

Publisher: The Star
Source: The Star

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