With Cape residential property so much in the news, what is the outlook for the much less publicised commercial property sector?

Bill Rawson, Chairman of Rawson Properties, who himself owns a substantial commercial property portfolio, says that two factors are now indisputable.

The first, he says, is that despite a fair amount of negative comment and talking down, returns on Cape commercial property in the last three to four years have almost always been "satisfactory" - usually between 10% and 12%, with an annual escalation of 5% to 10%.

"Returns on commercial property have, therefore, more than kept pace with inflation," says Rawson. "This factor has not gone unnoticed by the investing sector with the result that we at Rawsons are seeing a number of people returning to this type of investment - often with a sense of relief."

The second indisputable point, says Rawson, is that vacancies are down and there is a discernible increased demand for commercial property.

"Two to three years ago," he says, "there were almost 100 unrented retail outlets in Sea Point. Today there are very few indeed. Much the same could be said for certain areas of Observatory, Woodstock, Wynberg and other suburbs. Indeed, in the better, more affluent areas of the Southern Suburbs it is now exceptionally hard to find good retail space.

"The prospects for commercial property, therefore, look good and we are expecting the flow of investors back to this sector to gain strength over the next six to nine months."