Despite tight economic business conditions for the first half of 2000, the property market in South Africa has been stable - office vacancies have been declining marginally since December last year, industrial rentals appear to be moving out of the doldrums, and retail development sentiment continues to remain positive. With positive and improved economic prospects in 2001, the property market is set to improve significantly.
Despite tight economic business conditions for the first half of 2000, the property market in South Africa has been stable - office vacancies have been declining marginally since December last year, industrial rentals appear to be moving out of the doldrums, and retail development sentiment continues to remain positive. With positive and improved economic prospects in 2001, the property market is set to improve significantly.
Retail Management
The specialist nature of managing a retail property or portfolio, requires a dedicated retail management service.
JHI’s retail property management division comprises teams focused purely on managing retail buildings and shopping malls.
Infrastructure - The hot topic for the new millennium
Clearly, one of the major recurring themes that has emerged from the foregoing nodal commentary has been that of infrastructure provision. Throughout the province, if not the entire country, there are growing concerns regarding inadequate infrastructure - both in terms of maintenance and new investment. In fact, the pressing nature of infrastructure maintenance and capex could make infrastructure the most critical issue for the property development market into the next millennium.
The Industrial Sector
It is worth pointing out that from a macroeconomic perspective, the industrial property market may be negatively affected by the declining level of exports. From 11% real growth in 1996, Nedcor reports that exports grew by a very low 0,4% in 1998.
The Retail Sector
As a national context, it is important to note that private consumption dropped from 2% in 1997 to 1,1% in 1998 and is not expected to grow more than 0,5% to 1% in 1999. The split of private consumption expenditure in 1998 indicates that demand for durable goods, such as appliances, dropped by almost 5,5%.
The Office Sector
Perhaps the major news currently in the market about the Johannesburg CBD is the sale of the Carlton Centre, which is tipped to become a major corporate head office. While final details are still to be released to the marketplace, it is expected that the new tenant will be enjoying the benefits of an attractive rental differential.
Gauteng drives the South African economy, contributing some 38% of the national Gross Domestic Product (GDP). The province’s economic activity is mainly centred on the greater Johannesburg area, which includes the eastern, western, northern and southern metropolitan local council regions.
Despite tight economic business conditions for the first half of 2000, the property market in South Africa has been stable - office vacancies have been declining marginally since December last year, industrial rentals appear to be moving out of the doldrums, and retail development sentiment continues to remain positive. With positive and improved economic prospects in 2001, the property market is set to improve significantly.
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Joint report by Herbert Smith of Metroscape Town and Regional Planners & Development Consultants and JHI Professional Services, with country-specific input from JHI's International Division.
Expansion across South African borders is a topic that has received much attention in recent years, especially from retailers who are generally perceived to be leading the charge into Africa. But while there is good potential for both property investment and development in countries as far apart as Mauritius and Ghana, the decision to invest in Africa is not one to be taken lightly - especially in the case of a tangible investment such as real estate.
Johannesburg's southern industrial nodes have experienced relatively steady levels of activity over the past year, especially along the M2 motorway in an eastwards direction, although brokers report that rentals have generally remained static. Some evidence of sales activity is emerging, especially since interest rates have started to decrease.
In a bid to gain insight into the real retail market in the Johannesburg CBD, JHI undertook a combined consumer/ retailer survey in early 1999. The project aimed to probe attitudes and opinions about the node, especially in the light of city-wide concern that the CBD is sinking into urban decay.
GAUTENG
Perhaps the major news currently in the market about the Johannesburg CBD is the sale of the Carlton Centre to Transnet for use, inter alia, as its new corporate headquarters. This move is expected to bring several thousand office workers into the area, which should have positive spin-offs for adjacent and nearby retail facilities.
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