http://www.engineeringnews.co.za
  SEARCH
Login
R/€ = 13.13Change: -0.02
R/$ = 12.07Change: -0.13
Au 1187.17 $/ozChange: -20.08
Pt 1125.50 $/ozChange: -23.50
 
 
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 Construction News
Updated 7 hours ago The University of Johannesburg (UJ) Energy Movement’s solar-powered Ilanga II car, will be the first of its kind to cross into Namibia and Botswana on June 18. This formed part of the 2015 African Solar Drive, covering 4 160 km, which aside from the adventure of the...
Listed group Arrowhead Properties has announced the opening of an offer to invited shareholders to subscribe for shares in its residential property portfolio Indluplace Properties to raise R400-million, as well as the subsequent listing of the subsidiary on the JSE,...
Notwithstanding its recent downgrade to junk status, State-owned electricity utility Eskom is still planning to raise a whopping R66-billion in debt funding during 2015/16 to cover operational and capital expenditure (capex) shortfalls that will arise even after a...
Article contains comments
More
 
 
Latest News
Updated 6 hours ago Kusile’s recently appointed contractor said on Wednesday that it was confident it would meet the tough deadlines set by Eskom and that labour issues will be averted going forward. The Mpumalanga-based power station has experienced massive delays and its completion...
Updated 6 hours ago None of the municipalities in the Free State, North West and Limpopo attained clean audit opinions for 2013/14, and a majority also achieved qualified, adverse or disclaimed audit opinions, according to a report released by the Auditor General Kimi Makwetu on...
Updated 6 hours ago With State-owned power producer Eskom “failing” South Africa, smaller private energy producers were stepping up to the plate and collectively delivering more power at a faster pace than Eskom or any other single entity could, EE Publishers MD Chris Yelland said on...
More
 
 
Recent Research Reports
Steel 2015: A review of South Africa's steel sector (PDF Report)
Creamer Media’s Steel 2015 report provides an overview of the key developments in the global steel industry and particularly of South Africa’s steel sector over the past year, including details of production and consumption, as well as the country's primary carbon...
Projects in Progress 2015 - First Edition (PDF Report)
In fact, this edition of Creamer Media’s Projects in Progress 2015 supplement tracks developments taking place under the Renewable Energy Independent Power Producer Procurement Programme, which has had four bidding rounds. It appears to remain a shining light on the...
Electricity 2015: A review of South Africa's electricity sector (PDF Report)
Creamer Media’s Electricity 2015 report provides an overview of State-owned power utility Eskom and independent power producers, as well as electricity planning, transmission, distribution and the theft thereof, besides other issues.
Construction 2015: A review of South Africa’s construction sector (PDF Report)
Creamer Media’s Construction 2015 Report examines South Africa’s construction industry over the past 12 months. The report provides insight into the business environment; the key participants in the sector; local construction demand; geographic diversification;...
Liquid Fuels 2014 - A review of South Africa's Liquid Fuels sector (PDF Report)
Creamer Media’s Liquid Fuels 2014 Report examines these issues, focusing on the business environment, oil and gas exploration, the country’s feedstock supplies, the development of South Africa’s biofuels industry, fuel pricing, competition in the sector, the...
Water 2014: A review of South Africa's water sector (PDF Report)
Creamer Media’s Water 2014 report considers the aforementioned issues, not only in the South African context, but also in the African and global context, and examines the issues of water and sanitation, water quality and the demand for water, among others.
 
 
 
 
 
This Week's Magazine
While strongly welcoming the promulgation of the new Part 101 of South Africa’s civil aviation regulations, governing the commercial operation of civil remotely piloted aircraft (RPAs) in South Africa, the Commercial Unmanned Aircraft Association of Southern Africa...
LSM Distributors has contracted engineering consultancy WSP | Parsons Brinckerhoff Africa to undertake the R100-million restoration of the 54-year-old Kyalami racetrack, situated in Midrand. The restoration will assist in re-establishing it as a venue for...
South African Defence Minister Nosiviwe Mapisa-Nqakula has expressed the hope that the defence budget will be significantly increased over the next five years. She did so while addressing the media in her recent budget vote media briefing. The 2015/2016 defence...
The African Development Bank (AfDB) has been an implementing agency for the Global Environment Facility (GEF) since 2008. The relatively young portfolio has 28 projects over 30 countries on the continent according to the 2014 AfDB and GEF annual report released...
PAUL SPEAR Training and development should be an integral and proportionate part of the long-term strategy of all companies, regardless of their size
Investment in South African youth through apprenticeships and learnerships will not only create direct benefits for businesses but will also contribute significantly to job creation and socioeconomic transformation in the country.
 
 
 
 
 
 
 
 
 
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