While lagging residential property, there has been an exceptional growth in industrial property values over the past year, according to Gerard Zeelie, head of commercial property finance at First National Bank (FNB).

Commercial properties have also shown good growth in the last year.

A grade commercial property values have spiked by 14.9% in the past year, while B Grade property values have escalated by 13%.

The biggest increase in commercial property values has been Cape Town where values have soared by 45.2% in the case of A grade properties and 30.6% in the case of B grade properties. This is followed by Pretoria where price for A grade property have increased by 19.6% and those for B grade properties by 28.9%.

Johannesburg, however, has seen the biggest increase in industrial property values, followed by Port Elizabeth and then Durban. Johannesburg east in particular has seen values rising from between 38% and 44%, while Port Elizabeth has witnessed increases of between 30% and 39%, depending on whether it is secondary quality, industrial park or prime quality type industrial properties.

Zeelie says there is no single contributory factor responsible for the growth, but that rather the growth is underpinned by a few contributing factors that indicate stability and sustainability in the market - the biggest perhaps being liquidity.

"I can't predict when the next boom in commercial and industrial property will be. If I knew that, I would be working for myself and making a pile of money," he quips.

"But I can say that there are awesome opportunities in this arena at the moment and the market is becoming more liquid," he says.

"There is not one single driver responsible for this, but sustainability and liquidity are playing a major role," he says, adding that in the longer term, commercial and industrial property are always cheaper.

Good growth in the business market overall, he says, is being spurred - among other factors - by consumer confidence, low interest rates and tax incentives as well as support for entrepreneurs.

I-Net Bridge