Rode’s property news
Just as prime office rentals currently lead the pack in decentralized Johannesburg with 23% growth on the previous year, so too is this area leading the pack in committed new office developments.
Although survey results from the last quarter of 2007 do not yet show it, capitalization rates for non-residential properties are more than likely under pressure at the moment, says Erwin Rode of property economists and valuers Rode & Associates.
Prior to the recent paralysis of the mining industry, most South Africans probably did not fully appreciate the extent of the country’s electricity problems and the implications they hold for the economy — and hence the property market.
An interesting anomaly is beginning to occur across a number of South Africa’s more popular industrial townships: larger industrial buildings are commanding higher rental rates per m² than their smaller counterparts.
The rising star among property portfolios for the foreseeable future is the non-residential market.
With the residential property cycle having levelled off and heading for a downswing, buyers still wanting to invest should learn to spot up-and-coming areas.
From the R116-million upgrade to its beachfront to the multi-billion rand Coega industrial development zone and deepwater port 20km up the coast, Port Elizabeth’s economic rise is steadily spilling over to the property market.
Industrial land values are now in the same prime position that residential property found itself in during the last few years.
Residential rentals have not remotely kept up with house-price growth over the last few years.
A report presented recently to Cabinet on the development of policy on foreign land ownership is sure to draw much public debate, once it is updated with international comparatives and thrown open for comment.
Flat rentals in all of the major metropolitan areas grew faster than consumer inflation over the last two years, with Port Elizabeth the top performer, notching up a growth of 6,7% p.a.