Business Day Reporter

OCCUPIER and investment demand in Johannesburg commercial real estate is on the up, mirroring a trend in the European industry, according to an independent survey of major real estate markets.

Rents are also increasing while availability of space is levelling out. Yields are decreasing as prices rise, says the survey published by RICS, which has 110000 members globally and represents, regulates and promotes the work of property professionals in 120 countries.

The global property survey is to be published twice a year and covers 60 cities in North America, Europe, southeast Asia and Oceania. The survey includes SA.

The first RICS survey has found that the rise in demand for commercial real estate in the emerging economies of Asia and eastern Europe is surging ahead of western Europe, reflecting the accelerating eastward shift of the world’s economic centre.

Nick Harris of listed property loan stock company Ambit Properties says that in SA the low interest-rate environment and strong local economy have created demand for retail, office and industrial space.

Harris says vacancies are diminishing and triggering rental growth.

The prospects of rental growth, coupled with a fully priced equity market and a lacklustre offshore investment environment have fuelled strong demand for investment property, says Harris.

"This in turn has driven down yields in both the listed sector and direct property markets," he says.