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Positive Implications For Real Estate In South Africa

Positive Implications For Real Estate In South Africa | Office Spaces

One of South Africa’s leading real estate consulting firms, JLL, recently released its Q4 2017 South African market reports, for specific markets across the country. This includes the office markets in Cape town, Durban and Johannesburg, as well as the industrial markets for Durban and Johannesburg, along with an outline of the South African retail sector.

The analysis comes amid returning optimism and political sentiment in the local economy. This lends greater perspective to the current commercial property landscape and the sentiment sweeping through the marketplace. An improving GDP, along with the announcement of Cyril Ramaphosa as president of the ANC in December 2017, and his subsequent appointment as the country’s new president has much to do with the industry’s positive outlook.

Figures and facts for the office sector revealed remarkably different environments across the three major metros, with the Johannesburg office market continuing its record high vacancy rates, compared to South Africa’s other major metros. Johannesburg’s Q4 vacancy rate is sitting at 12.6. However, this hasn’t dampened office development activity, which is still concentrated in Johannesburg, accounting for over 67% of all ongoing office developments throughout South Africa.

Durban Remains Difficult To Predict

Thanks to quarter on quarter volatility in the Durban office sector, it’s become increasingly difficult to predict the market in the past year. JLL’s Q3 report deals with the possibility of oversupply developing in the market. Aside from their 12.4% vacancy rate in Q4 2012, the market has seen a decline in the year on year vacancy rate, which is positive.

Cape Town experienced a positive close to 2017, with its resilient market showing indications of improved vacancy rates across all subsectors. This includes notably its Grade P and Grade A office space. While a trend to convert office buildings to residential dwellings has contributed to a decline in vacancies, office stock still increased by upwards of 4% in 2017, which helped Cape Town to end off 2017 on a strong note.

Image courtesy of : JLL

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