Offices were oversupplied, industrial property was booming and retail property was somewhere in between, property economist Francois Viruly said on Friday.
"The boom in residential property is going to level off," he told a meeting of the South African Property Owners' Association (Sapoa) at a breakfast session here.
According to Viruly prices had been increasing by about 20% a year, and this could not go on.
"We have gone through the pain of getting to low inflation," Viruly said, adding that interest rates had come down."
That made building and buying cheaper but that also raised the risk of oversupply.
A higher growth rate also meant that people tended to move out of the cities.
The highest demand was for warehousing and low-grade industrial property.
"There is also increasing demand for complexes which include home, work and play: residential accommodation, shopping, office space and, ideally, leisure activities and schools - a return to a village lifestyle," he said.
According to Viruly people now want to shorten their transport distances and no longer want to spend hours getting to work and moving children around.
He said nobody wanted to build a retail complex without a residential component and there was an increasing demand for mixed-use complexes.
Specialist centres were also in demand, such as the Nasrec Centre in Gauteng which included a whole range of sports-related activities such as retailing and manufacturing.
Viruly said developers had not yet picked up the need for complexes which offered shared business facilities, like those used by groups of doctors and lawyers.
A major area of growth was in retail centres in the former townships and it was here that local government had a critical role to play.
"There is a demand for shop-front accommodation for doctors and lawyers," Viruly said.
There also a need for leases which included complete tenant installations, so that tenants did not have to provide their own shopfitting.
Where it worked, the government made an excellent anchor tenant, with a clinic or government offices providing the base for a retail development.
Viruly urged property developers to embrace the property charter, which had to be completed by June, and to form appropriate partnerships.
Daily Dispatch
Publisher: Daily Dispatch
Source: Daily Dispatch
