News

It’s no longer a best-kept secret. Property investors have for a while been eyeing and investing in residential conversions of office buildings in the central business districts in Cape Town and Johannesburg.

While real prime CBD office rentals have been flat everywhere, the Durban CBD has surprised with real rentals rising for the last three quarters. And money talks, a local leasing manager says. This increased demand is likely to be the result of firms returning to the CBD.

The non-residential property market remained under pressure in quarter 2003:1. Still, glimpses of a recovery were noticed here and there, say property economists Rode & Associates in their latest review of the property market.

Listed property is going from strength to strength. The property trust sector has shown a growth of 42% over the past year compared with the all-share index showing of -27%.

While the rand’s consistent rise spells bad news for SA rand-hedge stocks, investors in listed property have reason to be happy because this sector closely tracks the long-bond yield, which is drifting lower as US and European investors pour money into SA long bonds.

Listed property has finally wiped out its undervalued status relative to directly-held property. This property class is now on average trading at a small premium relative to non-listed property, which should lead to more listings of directly-held property in the listed property sector.

The current boom in house prices has done nothing to benefit South Africa’s poorer home-owners.

Listed property has finally wiped out its undervalued status relative to directly-held property. This property class is now on average trading at a small premium relative to non-listed property, which should lead to more listings of directly-held property in the listed property sector.

Listed property fund managers are putting far too much effort into finding unavailable shopping centres in which to invest, while there are so many fair-priced office and industrial properties available, says Rode CEO Erwin Rode.

The notoriously difficult valuation of shopping centres may be at an end, thanks to a new valuation tool developed by Rode Valuations.

Despite a poor prognosis for rental (income) growth in the medium term, listed property still represents good value for property investors wanting a relatively secure income stream. Thus this investment class is still a credible alternative to long bonds, say property economists Rode & Associates in their latest review of the property market.