WITH improvements to the fundamentals of most property sectors and markets particularly industrial and offices the time of purchases in 2003-04 will prove to be significant to the success of many listed property counters in the medium term or next three to five years, says JHI Real Estate's Property Report for this year.

Les Weil, executive chairman of JHI Real Estate, says that listed property counters are competing vigorously to augment their investments. This combined with the demands of private investors has resulted in a shortage of investment-category stock, which in turn has led to yields being driven down and the disparity between highquality properties and others.

JHI says that looking at sectoral performance, increased activity in the industrial property began in the second half of 2002 with large users entering the market looking for mainly warehouse space.

However, there was a limited supply of larger units. As a result, owner-occupiers sought select, tailor-made developments.

In addition to the estimated 960000m² industrial space planned nationally last year, about 530000m² was completed.

JHI says 39% of this was in Gauteng, followed by Western Cape and KwaZulu-Natal.

On the retail front, KwaZulu-Natal commanded the highest investment in retail property last year this investment increased 63% from 2002 levels, with Durban retail investment increasing by more than R280m over the same period.

JHI said that, in contrast, Pretoria saw the least amount of retail property investment last year.

According to JHI's report the important trend that emerged strongly last year was the growth in the confidence level of high-income earners reaching its highest level in eight years. Retailer confidence was also at high levels.

However, the report highlights that the office market will continue to present strategic risks to users and suppliers of office space in the future, assuming that the main ambit of monetary policy remains interest rates.

The report says that looking at existing space in the metropolitan areas, and office property investment thereof, investors appear to be giving the Johannesburg market a break, while Pretoria seems to be the investment destination of the moment.