‘PROPERTY MARKET IS IDEAL FOR INVESTORS’
QUALITY commercial and industrial properties should continue to give yields comparative to most other investment classes in the near future, in spite of the fiveyearlong stagnant market.
This is according to executive director at Business Partners Gerrie van Biljon, who says that the company, which oversees a property portfolio of nearly R1 billion, is optimistic about the property market as an investment haven in 2014, despite the possible risks to the sector.
Van Biljon believes the local property market is less exposed to shocks in the global economy compared with, for example, the stock markets.
“Any of the imminent setbacks … such as the raising of the closetozero percent interest rates of the developed world, or the tapering off of America’s quantitative easing policy will reflect immediately on the JSE, but not necessarily in property values,” he said.
There were very few bargains to be found in the commercial property sector — particularly manufacturing and retail — despite the economy’s sluggish crawl back from the recession, which proves the market’s status as a solid investment in difficult times, he said.
“Business owners that have been under pressure since the property boom, which ended in 2008, have either exited the market or now have their affairs in order. Investors tend to hang onto property investments rather than disposing of them in order to invest in lowbearing return categories, and as a result few good property investments enter the market.”
Van Biljon said the exception, however, is office space, which is likely to continue to suffer from stubbornly high vacancy rates in the near future. — Business Editor.