Demand for retail property is driving the South African commercial property market according to figures released by the South African Property Owners; Association’s latest index.
It says that the retail property sector is currently experiencing strong demand and is out-performing its commercial counterparts in other parts of the world. British-based property group IPD ranked South Africa as the most lucrative retail property destination among 23 other countries over the past two years.
According to Auction Alliance’s Elias Tzouvanni investor sentiment in the South African retail property market has been marked by a resurgence in consumer spending in 2011 following a spate of negative growth.
“The decline in prices, forecast growth in household consumption, low interest rates and rising levels of employment have eased consumer pressure and boosted the retail property sector,” says Tzouvanni.
There are about 1 400 shopping centres in South Africa, and Tzouvanni says the pace and extent of shopping centre development prior to the economic downturn several years ago has flooded the market making some of the smaller regional centres uncompetitive.
He says that a number of neighbourhood and regional shopping centres are experiencing substantial levels of financial distress, those centres in high traffic areas with a strong tenant base have proved that they are able to withstand the consequences of a financial downturn.
He says that financially distressed shopping centres come onto the market and remain there for a long time and are often sold by auction because suspenseful conditions linked to a possible sale are not met.
Auction Alliance is selling five shopping centres at the end of this month in Pretoria, Boksburg, Centurion and in Mossel Bay. Details of these auctions are on the Auction Alliance website at www.auction.co.za.
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