Financial Mail - Investors Monthly - - Contents - Prop­erty In­vest­ment edited by Joan Muller

The im­por­tance of real es­tate as a wealth cre­ator is un­der­scored by new re­search that re­veals that the to­tal value of all bricks and mor­tar in SA has risen nearly R1 tril­lion (or close to 20%) over the past five years.

Fig­ures re­leased by the Prop­erty Sec­tor Char­ter Coun­cil ear­lier this month show that the es­ti­mated size of the SA prop­erty sec­tor has grown from R4.9 tril­lion at the end of 2010 to R5.8 tril­lion at the end of 2015. That in­cludes all types of prop­erty — from houses and shopping cen­tres to of­fice blocks and va­cant land — whether owned by pri­vate in­di­vid­u­als, com­pa­nies (JSE-listed or un­listed), in­sti­tu­tions or the state.

The study re­veals that res­i­den­tial build­ings still ac­count for nearly three-quar­ters of all prop­erty owned in SA. The value of SA’s hous­ing sec­tor (ex­clud­ing houses in in­for­mal set­tle­ments) grew from an es­ti­mated R3 tril­lion to R3.9 tril­lion.

Re­tail prop­erty is the sec­ond-largest sub­sec­tor of SA’s broader prop­erty mar­ket, with a to­tal value of R534bn (R340bn in 2010), fol­lowed by of­fice build­ings at R357bn (R228bn) and industrial prop­er­ties at R281bn (R187bn). Ho­tels and other prop­er­ties ac­counted for R94bn (R25bn).

The re­search also re­vealed that pri­vate in­di­vid­u­als own the ma­jor­ity of res­i­den­tial prop­er­ties. In the com­mer­cial sec­tor (in­clud­ing of­fices, shopping cen­tres and industrial build­ings), cor­po­rates own nearly R790bn out of a to­tal R1.3 tril­lion. The JSE’s real es­tate in­vest­ment trust (Reit) sec­tor is the sec­ond-largest owner of com­mer­cial prop­erty, with a to­tal value of R300bn. The rest is split be­tween un­listed prop­erty funds (R130bn) and life and pen­sion funds (R50bn).

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