The last 18 months have played witness to a dramatic increase in interest rates, which to all intents and purposes should create some slack in the demand for commercial properties.

Not so according to Norman Raad, Head of Commercial Properties for the Northern Region at the Alliance Group.

Says Raad: ‘‘Huge interest in smaller retail centers and industrial properties remains. Indeed, the industrial market has exhibited consistent growth in rentals and demand for end users with some rentals reaching R50/m2. This can be attributed to the fact that building costs have risen, therefore the demand for existing premises is still driving prices up.’’

This demand is in line with current property trends across the spectrum: although the property balloon has deflated somewhat, demand remains high.

Adds Raad: ‘‘I believe that the interest rate hike will create slight price adjustments but will have absolutely no effect on the demand for quality buildings, centers and land. Confidence in South Africa has also been boosted thanks to the 2010 Soccer World Cup which has had a definitive knock-on effect on property prices. The adage ‘the right time to buy is now’ certainly rings true in this instance. Suffice to say purchasing commercial properties now with a view to long term returns is a good move.’’

Raad ends by advocating an entrepreneurial spirit. ‘‘While some market players might be feeling the interest rate pinch, the opportunities lie therein. Carpe diem!’’