According to the Investment Property Data Bank, the office sector reported returns of 24.5% versus the retail sector at 27.4% and industrial sector returns at 31.1% in 2006. 

“We expect the office sector to overtake its retail and industrial counterparts in 2008,” says Leslie Hermans, group COO of property solutions company Hermans & Romans.  “Numerous office nodes in South Africa are experiencing vacancy rates below five percent, and new prime space is surpassing the R130/m2 mark for the first time in history.”

Hermans says that interest rate increases are largely driving the trend because developers are hard hit by the resultant price hikes and the supply of new commercial developments is not meeting the current demand.