John Jack, CEO of Galetti Corporate Real Estate: "Election results set to boost commercial property prices and lower yields."

Africrest Properties intends to be one of the top 10 largest residential middle-income landlords in Gauteng within the next 5 years.

There seems to be insatiable demand for Ridgeside’s prime land which cascades towards the sea from the uMhlanga Ridge.

The introduction of non-bank lenders into the property market has been a boost for property investors, buyers and business owners. 

Property investors and developers are upbeat about the South African commercial property sector in 2013, despite analysts’ and property professionals’ expectations that the market will remain sluggish.

The prevailing low interest rate environment, which is at historically low levels following the reserve bank's July interest rate decision, has sparked renewed interest and activity in the commercial property market, especially through auctions.

Coming off the heady heights around 2008, commercial development activity now appears to be emerging from it's trough encountered around 2010/11 and where all segments of the sector had bottomed, as reflected in the graphs below. At constant prices, commercial investment activity is up by 8.2% (as compared to -1.4% for residential); it is virtually flat for the value of commercial plans passed.

Midway through 2012 (Jan-June YTD as measured in physical space, m2) we see that the trend in planning activity has picked up; so too for completions and particularly regarding industrial investments: Retail planning activity is up just over 8%, with industrial up 26%; in terms of completions retail is down nearly 10% and industrial is up a hefty 53%; both office planning and completions are down.

At a Provincial level, the Western Cape is showing robust confidence with planing activity strongly positive for all segments, so too Limpopo albeit of a lower base; Industrial planning is very strong in KZN at over 57% or 223,000m2; by comparison Gauteng industrial planning is down. On the completions front, Western Cape Industrial is strong at over 115%, or over 163,000m2; Eastern Cape and North West office completion activity is strong as is Free State retail; Gauteng is showing positive growth for all segment completions - particularly strong for industrial at 62% or over 264,000m2.

The reasonable investment returns offered by real estate coupled with appetite for the asset class (both direct and listed), is no doubt driving the relatively good growth in commercial investment activity, but in order for returns to be sustainable, it remains incumbent on market fundamentals to help prop up demand.

Published in Blog
Tuesday, 22 September 2009 02:00

Vukile raises R250m via securitisation

Vukile Property Fund has raised R250m through Vukile Investment Property Securitisation to reduce the cost of funding its commercial property investment.

A crash course in considering an investment property.

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