South Africa’s property market will take between six and nine months longer to recover than originally predicted. This is the view of Gerhard van Zyl, chief executive of Vukile, the listed property loan stock firm.
The company suggested in May this year that conditions in the property market would remain tough for 2010 but would start to recover in 2011. Now, Van Zyl says, the recovery is not imminent and may only start in the latter part of next year.
He says the combination of poor trading results from property companies, a lack of new business and minimal growth in rentals means that the recovery in the property market is still some way off.
He claims that despite the tough trading conditions, Vukile has managed to let the vacant space it has on its books. The company will go ahead with purchasing properties worth about R500-million from Sanlam Life as part of its plan to increase its property portfolio.
For the six months to September, Vukile bought nine properties from Sanlam valued at R537,6-million and sold two shopping centres – one in Hillcrest and the other at Pongola – for R47,1-million. These sales generated an accounting loss of R14,75-million.
Vukile’s 82 properties have a gross lettable area of more than a million square metres and this is spread between commercial space at 28%, retail space of 54% and industrial space of 18%. The value of its property portfolio is R5,78-billion.
The company managed to sign leases for almost 14 000 sqm of space at a contract value of R82-million since the beginning of October.
Readers' Comments Have a comment about this article? Email us now.