With improvements to the fundamentals of most property sectors andmarkets particularly industrial and offices the time of purchases in 2003-04will prove to be significant to the success of many listed property countersin the medium term or next three to five years, says JHI Real Estate'sProperty Report for this year.
Les Weil, executive chairman of JHI Real Estate, says that listed property counters are competing vigorously to augment their investments. This combinedwith the demands of private investors has resulted in a shortage of investment-categorystock, which in turn has led to yields being driven down and the disparitybetween highquality properties and others.
JHI says that looking at sectoral performance, increased activity inthe industrial property began in the second half of 2002 with large usersentering the market looking for mainly warehouse space.
However, there was a limited supply of larger units. As a result, owner-occupierssought select, tailor-made developments.
In addition to the estimated 960000m² industrial space plannednationally last year, about 530000m² was completed.
JHI says 39% of this was in Gauteng, followed by Western Cape and KwaZulu-Natal.
On the retail front, KwaZulu-Natal commanded the highest investmentin retail property last year this investment increased 63% from 2002 levels,with Durban retail investment increasing by more than R280m over the sameperiod.
JHI said that, in contrast, Pretoria saw the least amount of retailproperty investment last year.
According to JHI's report the important trend that emerged stronglylast year was the growth in the confidence level of high-income earnersreaching its highest level in eight years. Retailer confidence was alsoat high levels.
However, the report highlights that the office market will continueto present strategic risks to users and suppliers of office space in thefuture, assuming that the main ambit of monetary policy remains interestrates.
The report says that looking at existing space in the metropolitan areas,and office property investment thereof, investors appear to be giving theJohannesburg market a break, while Pretoria seems to be the investmentdestination of the moment.
