South Africa’s commercial retail property sector has been doing well, especially in the retail office sector, where there have been a lot of new developments, according to South African Property Owners Association (Sapoa) president Nomzamo Radebe, who spoke at a Sapoa media event on Monday.

Radebe told Engineering News Online, however, that there was a worry that the amount of vacancies in new office developments was "too high", though the market believes that the vacancy trend will turn around in two to three years.

“If the economy stays flat or declines, though, it will negatively affect the sector,” she said.

She added that Sapoa was getting mixed messages regarding the outlook for South Africa’s economic growth, and that the uncertainty could also negatively impact on the office space sector.

She noted that industrial retail space was performing well in the logistics and manufacturing sectors, but that the heavy manufacturing space was underperforming.

“Heavy manufacturing is underperforming owing to the cost of doing business. It is expensive and some companies have actually closed down in the short time that they have been importing,” she said.

She added that last year’s load-shedding also caused uncertainty around power supply, which has contributed to the downturn in the sector.

“Political uncertainty and the potential credit rating downturn the country is facing by ratings agency Moody's in December are making people in the retail commercial property sector a bit hesitant,” she noted.

She highlighted confidence in the business sector and pressure on consumers, coupled with unemployment and the 2019 national elections, as challenges.

Also speaking to Engineering News Online, Sapoa CEO Neil Gopal noted that the recent change in South Africa’s political landscape, following the local government elections, had been seen as positive by some CEOs in the industry.

“We have not had difficulties working with large metros in the past though. We worked well with previous administrations in Tshwane and Johannesburg,” he said.

He added that Sapoa was waiting to hear what the policies of the new Johannesburg and Tshwane mayors were to attract new investment into those districts.

“We have recently had engagements with the new mayor of Johannesburg, Herman Mashaba, which have been very positive. The mayors understand the importance of business efficiencies and the strategies of Sapoa,” he said.

He added that as much as they needed investments into their metro’s, Sapoa needed efficiently run cities, “which has been the main message that has come out of our meetings so far".

“Whatever programmes are carried out, they need to support business and the property industry, it's about making sure there is a mutual appreciation,” he noted.