Nick Wilson

Property Correspondent

ANY doubts the market may have had about whether the office property market had turned the corner should now be dispelled.

According to the latest report released by property economists Rode and Associates, the rentals for A-grade offices are increasing.

This could also benefit listed property companies with large exposures to offices this year.

Rode & Associates said office rentals climbed further during the third quarter of last year.

The group said on the whole, office rentals in decentralised areas increased 5% on a year earlier, while rentals in central business districts were almost 12% higher than at the same time in 2004.

But they also offered the sober news that building cost inflation was expected to have grown by 17,1% during the reporting quarter, whereas building input costs are expected to have risen 6,7%.

This implied that real rentals had continued to decline.

Mariette Warner, head of property funds at Stanlib Asset Management, said Rode’s survey confirmed what she had been saying for some time — that companies with large exposure to offices would start generating real earnings growth. And industrial and retail property would continue to be strong.