THE PROPERTY HANDBOOK 2017
Office and industrial property outlook: Caution sets in
While activity in the market has continued, recent trends depict an increase in caution in the market which will set the tone for the next couple of years
The past few years have not been the most encouraging for the SA economy, with anaemic economic growth putting a damper on business and investor confidence while political instability serves only to make matters worse. Nevertheless, the long-term nature of real estate investment allows investors to look ahead and make decisions based on future returns. While activity in the market has continued, recent trends show an increase in caution in the market, which will set the tone for the next couple of years. It is interesting to note the increase in levels of real estate investment in SA despite notable concerns about economic and political issues. We witnessed the second consecutive quarter of negative GDP growth in the first quarter of 2017 leaving us in a recession, employment grew a mere 0.3% y/y in 2016 while business confidence plummeted to 2009 levels. That being said, a total of R8.3bn was invested in existing office stock in 2016, growth of 8.9% on a y/y basis. Gauteng continue...
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