http://www.engineeringnews.co.za
  SEARCH
Login
R/€ = 13.58Change: 0.17
R/$ = 10.95Change: 0.02
Au 1201.61 $/ozChange: 2.45
Pt 1226.50 $/ozChange: -3.50
 
 
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 Contact Us
 
 
 
RSS Feed
Article   Comments   Other News   Research   Magazine  
 
 
Sep 25, 2012

Little sign of full-blown property recovery

Back
Industrial|Property Owners Association/ Investment Property Databank|Rental|Electricity Costs|Retail|Stan Garrun
Industrial|Rental||
industrial|property-owners-association-investment-property-databank|rental|electricity-costs|retail|stan-garrun
© Reuse this



Although there had been moderate improvements in the property market over the past six months, there were little sign of a full-blown recovery across the sector, the South African Property Owners Association/ Investment Property Databank’s (IPD’s) biannual property indicator highlighted on Tuesday.

Property investment overall delivered a return of 5.9% in the period ended June, which comprised 1.5% capital growth and a 4.4% income return for the first six months of the year.

“A significant industry obstacle was the sky-rocketing operating costs, which are quickly outstripping income growth and pushing cost ratios to unattractive levels,” the report said.

Electricity costs continued to rise, and at a monthly average of R12.8/m2, it now makes up one-third of the total operating cost bill for property owners. Rates and taxes constitute a further 20% of the total.

The burden of costs is being felt jointly between tenants and owners; however, around three-quarters of total costs fell to the tenant to pay.

The report noted that the picture was worst in the office sector. Plagued by stubborn vacancy rates, which shifted from 12.1% in December 2011 to 15.0% in June 2012, and negligible rental growth at just 0.1%, office properties have also seen the highest growth in operating costs across all property sectors.

Offices in inner city and provincial nodes are the hardest hit, with rental levels moving backwards.

Nevertheless, the report stated that there was room for cautious optimism as gains were evident in particularly the retail and industrial sectors.

“Retail property returned the top capital growth rates at 1.7%, along with solid 3.7% rental growth and strengthening occupancy rates. Vacancies in the sector improved from 6.0% to 5.7% over the first half of the year,” explained IPD MD Stan Garrun.

Positive rental growth at 4.2% and declining vacancies from 4.3% to 4.1% are likewise good news for industrial property investments.

Six months ago, the IPD’s 2011 results showed 10.4% yearly returns in property investments overall, with a slight uptick in the second half of the year that suggested a possible recovery. At the same time, vacancies increased to 6.9%, rental growth declined to 6.2% and yields weakened by 36 basis points, to 9.6%.

“Although returns for the first half of 2012 are better than 2011, the results show a fairly muted picture of performance. We are still not seeing any substantial recovery,” Garrun noted.
 

Edited by: Mariaan Webb
© Reuse this Comment Guidelines (150 word limit)
 
 
 
 
 
 
 
 
 
Latest News
Industrialisation remains a major part of the South African developmental agenda and an important vehicle towards achieving the Department of Trade and Industry’s (DTI’s) target of creating 100 black industrialists in the next five years, Trade and Industry...
The construction of a new innovation hub in the heart of the Dube TradePort, in Durban, was set to kick off in March 2016, as Dube TradePort Corporation sealed a R160-million lease agreement with Eureka Capital. Eureka Capital planned to develop a seven-storey 21 500...
South Africa will become the first African country to host the Organisation for Economic Cooperation and Development’s (OECD’s) Steel Committee Conference when the committee’s seventy-seventh session takes place in Cape Town between December 11 and 12. The...
More
 
 
Recent Research Reports
Defence 2014: A review of South Africa's defence industry (PDF Report)
Creamer Media’s Defence 2014 report examines South Africa’s defence industry, with particular focus on the key participants in the sector, the innovations that have come out of the sector, local and export demand, South Africa’s controversial multibillion-rand...
Road and Rail 2014: A review of South Africa's road and rail infrastructure (PDF report)
Creamer Media’s Road and Rail 2014 report examines South Africa’s road and rail transport system, with particular focus on the size and state of the country’s road and rail network, the funding and maintenance of these respective networks, and the push to move road...
Real Economy Year Book 2014 (PDF Report)
This edition drills down into the performance and outlook for a variety of sectors, including automotive, construction, electricity, transport, steel, water, coal, gold, iron-ore and platinum.
Real Economy Insight: Automotive 2014 (PDF Report)
This four-page brief covers key developments in the automotive industry over the past 12 months, including an overview of South Africa’s automotive market, trade figures, production and the policies influencing the sector.
Real Economy Insight: Construction 2014 (PDF Report)
This five-page brief covers key developments in the construction industry over the past 12 months. It provides an overview of the sector and includes details of employment in the sector, infrastructure and municipal spending, as well as insight into companies’...
Real Economy Insight: Electricity 2014 (PDF Report)
This five-page brief covers key developments in the electricity industry over the past 12 months, including details of State-owned power utility Eskom’s generation activities, funding and tariffs, independent power producers and prospects for the sector.
 
 
 
 
 
This Week's Magazine
JSE-listed real estate investment trust (REIT) Rebosis Property Fund achieved a distribution growth of 8.1% to 99.45c per linked unit in the financial year ended August 31, despite volatile market conditions.
JAMES ROBERTS The MOM incubator was designed to help babies in developing nations who were dying in conflict-struck nations or who do not receive hospital care
A low-cost, inflatable incubator won this year’s international James Dyson design award, which aims to encourage and inspire the next generation of design engineers.
The World Bank released its ‘Doing Business 2015: Going Beyond Efficiency’ report last month and ranked South Africa 43 out of 189 global economies for its ease of doing business, with Singapore topping the rankings.
Air Products South Africa officially launched its R300-million Eastern Cape air- separation unit (ASU), at its new manufacturing facility in the Coega Industrial Development Zone (IDZ), earlier this month. It is the second facility that Air Products launched in South...
BMW South Africa (SA) has signed a power purchasing agreement with energy company Bio2Watt. The offtake partnership will bring renewable energy to the carmaker’s Rosslyn plant, north of Pretoria.
 
 
 
 
 
 
 
 
 
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