According to South African sources, the Commercial Property market is recovering faster than anyone thought possible.

“Investment in South Africa’s commercial real estate market produced double-digit nominal total returns of 13%, the SAPOA/IPD Property Index for 2008 shows. However, once last year’s high inflation rate of 11,5% is factored in, these returns equate to inflation-adjusted ‘real returns’ of just 1,3% for 2008. Nominal returns on property values dropped far below the 27.5% which 2007 yielded and were the lowest recorded since 2002. Equities and property equities suffered a defeating -23.2% loss in 2008 whilst the JSE PLS Index returned -2.3% and the JSE PUT Index returned -9.7%.”

However the return on commercial property has been in the positive range of 13%, “We have not witnessed the rapid re-pricing of real estate that is being experienced elsewhere, certainly not on the same scale. Property fundamentals are still coming through quite strongly. However, it is important to bear in mind that the inflation-adjusted total returns, at 1,3%, were modest compared with the average annualised real return of 9,3% over the last 14 years,” said IPD South Africa MD Stan Garrun, who spoke last week at the SAPOA/IPD Property Index launch 2009, in Johannesburg,

In an uncertain world that it quite a vote of confidence. Given the strikes and local temporary shut downs, you could think this was unfounded, however the 2010 engine is still driving forward and with rumours of a new larger project involving transport in the western cape circling within provincial and government circles worth in the region of R80Billion (£6Billion).

On the rest of the industrial and commercial properties, the news  is positive news and a great way to start the Q3.With the strikes having been resolved the new bus rapid transport system back on track, with the stadiums to due to be handed over to the LOC by year end the situation is looking good.

“Last year’s performance was led by the industrial-property sector, which recorded 18,1% total return, followed by offices with 14% and retail at 11,1%.

Income returns for industrial and offices were 9% and 9%, respectively while retail provided 7,8% to produce the all property average income return of 8,3%.

The strength of capital growth differed more widely across the sectors. Industrials led the way, returning 8,4%, followed by offices, at 4,6% and retail, at 3,1%, to produce an average of 4,4% compared to 17,5% last year.

All property yields moved out by 20 basis points over the 12 months, ending December 2008 at 7,7%.” source quoted : Dennis Ndaba,Engineering news

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“Demand is outstripping supply across the UK housing market, with estate agents registering four house hunters to every available property.
The monthly market survey of the National Association of Estate Agents found that the average branch had 299 house hunters on its books in May – up from 265 the previous month and 247 in May 2008.

The average branch had 69 properties on its books. For the second month running estate agents also reported a successful selling period.

The average branch sold 10 properties, a 30 per cent increase on the same time last year and double that sold on average in August 2008.” – According to the house fund, industry web site

Contact  Chase Devonshire on 0207 740 1770 for your property ,investment or tenancy queries and get your dream property!

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Property prices are going down would not want to ask our investor to buy right now due to the low cost.  We think differently.

It is of our opinion that investment is good at the moment. This is because if you have the funds, you can pick up a property and that the actual yield has risen not due to the cost of the properties, but because rents have actually gone up!!

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