Up­turn in in­quiries or in­dus­trial space her­alds a re­cov­er­ing mar­ket

Weekend Argus (Saturday Edition) - - PROPERTY -

WITH the fes­tive sea­son over and J a n u a r y we l l u n d e r way, s o me me­dia re­ports re­flect in­creased busi­ness con­fi­dence in South Africa in gen­eral, cou­pled with grow­ing an­tic­i­pa­tion about the World Cup.

JHI chief ex­ec­u­tive, Marna van der Walt, is cau­tiously op­ti­mistic and re­ports that in the first few weeks of trad­ing this year, the com­pany’s in­dus­trial bro­kers have seen a sig­nif­i­cant up­turn in in­quiries for space.

“Al­though this trend has not e x t e n d e d t o t h e o f f i c e s e c t o r, i t her­alds a pos­i­tive sig­nal for the prop­erty mar­ket. How­ever, this must be vi ewed re al i s t i c al l y a g ai nst t he back­drop of a con­strained re­tail sec­tor and con­trac­tion in house­hold spending, which di­rectly af­fects the man­u­fac­tur­ing sec­tor. The pro­posed elec­tric­ity price hikes – still much un­der de­bate – would also neg­a­tively af­fect con­fi­dence, es­pe­cially in man­u­fac­tur­ing,” she says.

“ On t he ot her hand al t hough banks have to some ex­tent amended their res­i­den­tial lend­ing cri­te­ria, some banks still re­quire up to 20 per­cent de­posits from in­vestors en­ter­ing the com­mer­cial mar­ket, which is of con­cern. But un­like in 2009, when the re­ces­sion caught many off guard, this year there seems to be a gen­eral pre­pared­ness to boldly face the chal­lenges ahead.

A fur­ther re­duced in­ter­est rate in the first quar­ter or first half of the year would be wel­come, par­tic­u­larly i f c o n s u me r s p e n d i n g r e mai n s slug­gish.

How­ever, it seems in­ter­est rates may start ris­ing in the last quar­ter of the year, which may put a damp- ener on eco­nomic re­cov­ery.”

On an up­beat note, Van der Walt says in­vest­ment op­por­tu­ni­ties in the com­mer­cial prop­erty mar­ket do ex­ist, par­tic­u­larly in ar­eas that will be pos­i­tively af­fected by in­fras­truc­tural de­vel­op­ments such as the Gau­train and BRT routes.

“The gen­eral con­sen­sus is that ma­jor op­por­tu­ni­ties will present them­selves in the in­dus­trial sec­tor and the re­cent in­di­ca­tion by the Depart­ment of Trade and In­dus­try that it will re­view the pol­icy on in­dus­trial de­vel­op­ment zones may lead to in­creased in­vestor in­cen­tives. In ad­di­tion, the in­fras­truc­tural im­prove­ments in host cities for the World Cup have added value to th­ese ar­eas, which will help boost mar­ket sen­ti­ment and in­vestor con­fi­dence.”

She says though the World Cup will not have an im­me­di­ate ef­fect on com­mer­cial prop­erty, a suc­cess­ful tour­na­ment will bode well for the cre­ation of in­vest­ment op­por­tu­ni­ties to­wards the end of the year and in the fol­low­ing two years as a re­sult of in­creased busi­ness con­fi­dence. Un­for t unately, op­por t uni­ties for re­tail in­vest­ments will re­main low in the im­me­di­ate fu­ture as listed prices are still too high.

Va n d e r Wal t s ay s i nve s t o r s should pro­vide ten­ants with more in­cen­tives in 2010.

“Lower rentals and an in­crease in ten­ant in­stal­la­tion al­lowances are some of the in­cen­tives which JHI is rec­om­mend­ing that land­lords im­ple­ment to at­tract and re­tain ten­ants.

Call JHI on 011 911 8000 or e-mail info@jhi.co.za.

Newspapers in English

Newspapers from South Africa

© PressReader. All rights reserved.