Real Estate Investor Magazine South Africa November 2014 | Page 43

COMMERCIAL
REI COMMERCIAL

Commercial rental growth

T

he latest Rode’s Report on the SA Property Market (2014:3) reveals moderate growth
in the market rentals of office space and fairly decent yearly growth for market rentals
of industrial properties.

Nominal decentralized
grade-A office rentals
Source of data:
Rode’s Time Series

On a national basis in Q2 2014, market rentals for prime office space could only show
yearly growth of about 3%. A look at the regional picture shows no growth, on average,
in market rentals in Durban decentralized, while in Johannesburg and Pretoria, rentals
in decentralized nodes recorded growth of 2%. Cape Town decentralized was the star
performer, with its growth in market rentals of 5%. In the reporting quarter, building costs
are expected to have shown growth of about 4%, implying that Cape Town was also the
only region where real rentals were able to show growth, albeit only marginally.

Nominal prime
industrial rentals
(500-m 2 units)
Source of data:
Rode’s Time Series

During Q2 2014, market rentals for industrial properties in the Cape Peninsula and on
the East Rand showed fairly decent yearly growth of 6%. On the Central Witwatersrand
and in Durban, however, rentals grew only 3%. As for rental growth prospects, the
underperformance of the manufacturing and retail sectors of the economy does not bode
well for the demand for manufacturing and warehouse space to rent, likely resulting in
continued modest growth in industrial market rentals.
Evan Jankelowitz
Sesfikile Capital

For the last three years, the listed property sector has averaged 22% in
total returns, including capital growth, per annum. This can’t be sustained
indefinitely. It’s been a great year, but may be more subdued in the final
months of 2014. We still see good value for the medium- to long-term
investors.
Morné Wilken
CEO
Attacq

We welcome Attacq’s inclusion as a medium-cap in the FTSE Global Equity
Index Series (GEIS), the FTSE All-World Index and the FTSE AllCap (LMS)
Index. With gross assets valued at R18.4bn and market capitalisation
of R14.7bn, Attacq focuses on sustainable capital appreciation through
development and ownership of a balanced property portfolio with
contractual income streams.
www.reimag.co.za

Expert Q&A

More
corporate
action in
the listed
property
sector?

Keillen Ndlovu
Head of Listed
Property Funds
Stanlib
Q Is speculation about further
consolidation in the SA REIT sector in
2014 accurate?

There’s still lots of activity, notwithstanding
Redefine’s failure to take over Fountainhead and
the collapse of the tripartite merger of Rebosis,
Delta and Ascension. Redefine acquired an 11%
stake in Emira Property Fund, acquired Annuity
and has to start the process with Fountainhead
again. The Premium/Octodec merger and
the Acucap/Sycom merger are on the cards.
Growthpoint is pursuing Acucap. Arrowhead
bought Vividend and has not given up on Dipula.
Vukile will relook at Synergy. Rebosis is looking
to acquire the rest of Ascension. There’s still