This is despite the high interest rate environment, a general slowdown in economic growth and the electricity crisis.

Chief executive Gerhard van Zyl says the huge demand for building materials and a shortage of construction and engineering skills have contributed to rising building costs. In addition, there is a severe shortage of zoned land for development.  All of this implies a need for higher rentals to justify new office and industrial developments.

This sentiment is echoed by the latest FNB Commercial Property Finance (CPF) Commercial Property Building Cost Index (an index reflecting the average building cost/m², as priced by building contractors when winning tenders) which reflected a growth in building costs of 16% last year.