Weekend Witness - - Money -

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.

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