http://www.engineeringnews.co.za
  SEARCH
Login
R/€ = 14.10Change: -0.11
R/$ = 10.74Change: -0.08
Au 1264.15 $/ozChange: -23.03
Pt 1409.50 $/ozChange: -14.50
 
 
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)
 
 
 
 
 
 
 
 
Other Construction News
Updated 2 hours 4 minutes ago Despite various challenges related to the extraction of shale oil and gas, as countries grow accustomed to the idea, the use of shale as a form of energy will be more widely pursued, international oil and gas market analyst Michael Lynch said on Tuesday. Speaking at...
Updated 2 hours 52 minutes ago Regional interconnections and oil discoveries are expected to drive the transmission and distribution industry’s (T&D’s) growth in East Africa, the second-fastest growing region in Africa, global growth consulting firm Frost & Sullivan said on Tuesday. The...
Neil Gopal
The South African Property Owners’ Association (Sapoa) has appealed to Rural Development and Land Affairs Minister Gugile Nkwinti to invoke the discretionary powers available to him under the Spatial Planning and Land Use Management Act of 2013 to prevent...
More
 
 
Latest News
Updated 2 hours 3 minutes ago Despite various challenges related to the extraction of shale oil and gas, as countries grow accustomed to the idea, the use of shale as a form of energy will be more widely pursued, international oil and gas market analyst Michael Lynch said on Tuesday. Speaking at...
Updated 2 hours 6 minutes ago A consortium led by two Kenyan firms won a government tender to build a 1 000-MW, coal-fired power plant, company officials said on Tuesday, part of moves to satisfy rising demand for energy in East Africa's biggest economy. Kenya suffers from regular blackouts due...
TNPA CEO Tau Morwe
Updated 2 hours 12 minutes ago The announcement of the successful bidder for the construction of Durban’s long-awaited passenger cruise terminal was imminent, Transnet National Ports Authority (TNPA) CEO Tau Morwe told delegates at the African Ports Evolution Conference in Durban on Tuesday. ...
More
 
 
Recent Research Reports
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...
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.
Real Economy Insight: Road and Rail 2014 (PDF Report)
This six-page brief covers key developments in the road and rail industries over the past 12 months, including details of South Africa’s road and rail network and prospects for both sectors.
 
 
 
 
 
This Week's Magazine
South African State-owned defence industrial group Denel has announced its fourth consecutive year of profits. The group's results for the financial year 2013/2014 were recently announced at its head office in Centurion, south of Pretoria. Revenues grew by 17%, net...
There is little opportunity for JSE-listed infrastructure company Group Five to grow shareholder value in the domestic market, says CEO Mike Upton. He says value can still be found in the private sector, in the renewable and industrial power sector, as well as in...
The National Association of Automobile Manufacturers of South Africa (Naamsa) has announced the event dates of the 2015 Johannesburg International Motor Show (JIMS). The event will take place from October 14 to October 25, 2015, at the Johannesburg Expo Centre, Nasrec.
UK engineering support services provider Babcock is set to deliver the largest order of global truck manufacturer DAF’s truck tractors in Southern Africa to bulk carrier road-based logistics company Ngululu Bulk Carriers (NBC), with 133 trucks to be delivered in...
Digital radio communications in the African local government space can open up the world, but have many challenges to overcome, notes integration and migration of legacy radio communications infrastructure with digital mobile radio company Emcom Wireless head of...
 
 
 
 
 
 
 
 
 
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