Commercial property was the worst-performing asset class in SA last year, according to the latest SA Property index (Sapix).

The total return (capital growth and income) on all property was 10,5% compared with 28,3% for equities and 17,7% for 10year bonds. Even cash performed better at 10,6%.

Retail propertys 13,3%, with 3,4% capital growth, helped to hide the dismal performance of offices (7,7% growth with 3,3% capital loss) and industrial property (7,4% and -4,5%).

Oversupply was the main culprit with offices, says property economist Francois Viruly. Income rose only 0,5% and initial yields on offices weakened from 10,5% to 10,8%.

Sapix is a joint venture between the SA property industry and the British Investment Property Databank.

Financial Mail