http://www.engineeringnews.co.za
  SEARCH
Login
R/€ = 13.85Change: 0.07
R/$ = 12.64Change: 0.05
Au 1088.12 $/ozChange: -3.33
Pt 950.00 $/ozChange: -16.00
 
 
Note: Search is limited to the most recent 250 articles. Set date range to access earlier articles.
Where? With... When?








Start
 
End
 
 
And must exclude these words...
Close Main Search
Close Main Login
My Profile News Alerts Newsletters Logout Close Main Profile
 
Agriculture   Automotive   Chemicals   Competition Policy   Construction   Defence   Economy   Electricity   Energy   Environment   ICT   Metals   Mining   Science and Technology   Services   Trade   Transport & Logistics   Water  
What's On Press Office Tenders Suppliers Directory Research Jobs Announcements Letters Contact Us
 
 
 
RSS Feed
Article   Comments   Other News   Research   Magazine  
 
 
Mar 30, 2011

Commercial and industrial properties could be headed for a boom

Back
Discussion around South Africa's property market by industry experts Erwin Rode and John Loos. Editing: Darlene Creamer, Camera work: Nicholas Boyd.
 
 
 
Africa|Building|Housing|Industrial|Sustainable|Africa|Manufacturing
Africa|Building|Housing|Industrial|Sustainable|Africa|Manufacturing
africa-company|building|housing|industrial|sustainable|africa|manufacturing
© Reuse this



South Africa’s commercial and industrial property sector might be set for a price boom by 2014/15, if the country was able to maintain sustainable growth over this period, industry experts said on Wednesday.

Speaking at the launch of the Rode’s property report, Erwin Rode said office and commercial renting prices had reached the bottom of a trough and were expected to climb in coming years if the country was able to maintain a financial recovery.

“Office and industrial spaces are currently dirt cheap and we anticipate that properties could significantly rise in value for many years to come.”

In 2010, office rentals showed a 6% year-on-year recovery, while the industrial property market had also started to smooth out, mostly on the back of a recovery in the country’s manufacturing sector.

However, Rode believed that the government’s New Growth Path, which has a strong emphasis on boosting the manufacturing sector, would not have a significant impact on the industrial property sector in the shorter term, or up to 2015.

FNB property economist and strategist John Loos said rising bond yields and a lack of progress in reducing commercial and industrial vacancies in 2010 suggested a rise in capital rates in 2011, which could see slow movement in these sectors during the year.

However, he agreed with Rode that improving fundamentals such as a slowdown in building activity and a decline in vacancy rates, could support strong growth by the next cycle of interest rate cuts, which he predicted could come round by 2014.

In comparison, the Rode’s report showed that residential properties had been highly overpriced for years and only showed a mild dip in historically high prices during the recession.

Rode pointed out that this indicated that housing prices were set to decline in real terms.

Loos added that the country’s consumers were saddled with extremely high debt burdens, which would become even heavier as inflationary concerns grow and interest rate hikes are set to come into play.

Current interest rates at 9% in South Africa were last seen in the 1970s. This had also assisted in the “mini recovery”, as Loos referred to it, experienced in the property market during 2010, compared with the previous year.

But, Loos warned that such a recovery could be short-lived as rising inflation pressures increase the risk of rates hikes by the South African Reserve Bank.

“We have seen global inflation of 33,7% in food prices and around 32% in oil prices, and Governor Gill Marcus has in recent months warned that this would also have an impact on South Africa’s economy. But, I do believe that the central bank will be mindful before hiking rates, and we expect a hike of about three percentage points by late 2011.

“All-in-all, 2011 looks set to be a year of slowing economic growth, on the back of rising commodity prices and increased central bank tightening, globally,” he added.
 

Edited by: Mariaan Webb
Creamer Media Senior Researcher and Deputy Editor Online
© Reuse this Comment Guidelines (150 word limit)
 
 
 
 
 
 
 
 
Other Video News
More
 
 
Latest News
Updated 17 minutes ago The Democratic Alliance (DA) has come out in support of an independent inquiry into the management of the Department of Telecommunications and Postal Services (DTPS). Telecommunications and Postal Services Minister Dr Siyabonga Cwele and the Public Service Commission...
Updated 36 minutes ago The Opposition to Urban Tolling Alliance (Outa) has derided Minister of Transport Dipuo Peters’ report on statistics showing an increase in e-toll collections. According to Outa, Peters' comparison of e-toll collections for May and June with the preceding seven...
Updated 1 hour 40 minutes ago Management instability continues unabated at South African Airways (SAA) where the human resources GM Thuli Mpshe has now been appointed to run the airline on a temporary basis and a dispute rages over the validity of the renewed contract of CFO Wolf Meyer‚ Business...
More
 
 
Recent Research Reports
Real Economy Year Book 2015 (PDF Report)
There are very few beacons of hope on South Africa’s economic horizon. Economic growth is weak, unemployment is rising, electricity supply is insufficient to meet demand and/or spur growth, with poor prospects for many of the commodities mined and exported. However,...
Real Economy Insight: Automotive 2015 (PDF Report)
Creamer Media’s Real Economy Year Book comprises separate reports under the banner Real Economy Insight and investigates key developments in the automotive, construction, electricity, road and rail, steel, water, gold, iron-ore and platinum sectors.
Real Economy Insight: Water 2015 (PDF Report)
Creamer Media’s Real Economy Year Book has been divided into individual reports under the banner Real Economy Insight and investigates key developments in the automotive, construction, electricity, road and rail, steel, water, coal, gold, iron-ore and platinum sectors.
Real Economy Insight: Construction 2015 (PDF Report)
Creamer Media’s Real Economy Year Book has been divided into individual reports under the banner Real Economy Insight and investigates key developments in the automotive, construction, electricity, road and rail, steel, water, coal, gold, iron-ore and platinum sectors.
Real Economy Insight: Electricity 2015 (PDF Report)
Creamer Media’s Real Economy Year Book has been divided into individual reports under the banner Real Economy Insight and investigates key developments in the automotive, construction, electricity, road and rail, steel, water, coal, gold, iron-ore and platinum sectors.
Real Economy Insight: Road and Rail 2015 (PDF Report)
Creamer Media’s Real Economy Year Book has been divided into individual reports under the banner Real Economy Insight and investigates key developments in the automotive, construction, electricity, road and rail, steel, water, coal, gold, iron-ore and platinum sectors.
 
 
 
 
 
This Week's Magazine
Daimler truck test engineer Dirk Stranz pushes one button, and then retracts his hands from the steering wheel of the Mercedes-Benz Future Truck 2025. “And now the truck is driving itself.”
The statutory body responsible for skills development and support in the banking sector, BANKSETA, was investing R68-million in the capacity building project of the University of Venda (UniVen), announced Bankseta company secretary Caroline King at a media event in...
LIONEL MOYAL Cloud services providers must compete against other cloud services providers for business by providing up-to-date systems and services
Legacy information technology (IT) systems are becoming increasingly obsolete because of the maturity, efficiencies and cost effectiveness of cloud-based IT services, says information and communication technology major T-Systems subsidiary Intervate head Lionel...
ARMANDÉ KRUGER Balancing the collection and processing of data must be aligned to strategy
Many complementary services enable companies to derive broad value from data inside and outside them. The complexity of data management means that companies’ strategies determine the various data systems and functions they will use, says PBT Group regional sales...
The South African Civil Aviation Authority (SACAA) has announced that it had awarded the country’s first remotely piloted aircraft systems (RPAS) pilot’s licence. It was issued on Friday, July 10, to SACAA employee and qualified commercial pilot Nicole Swart,...
 
 
 
 
 
 
 
 
 
Alert Close
Embed Code Close
content
Research Reports Close
Research Reports are a product of the
Research Channel Africa. Reports can be bought individually or you can gain full access to all reports as part of a Research Channel Africa subscription.
Find Out More Buy Report
 
 
Close
Engineering News
Completely Re-Engineered
Experience it now. Click here
*website to launch in a few weeks
Subscribe Now for $96 Close
Subscribe Now for $96