News
Posted on 2022-07-08
The JSE All Property Index closed at 7 512 last night.
The July fuel price increase
may lead to the continuation of other trends relative to SA’s property
markets says John Loos, Property Sector Strategist at FNB Commercial
Property Finance, and with rising interest rates, FNB predicts weaker
commercial property demand for the remainder of this year.
While
fuel prices indirectly contribute to higher interest rates, they also
indirectly exert upward pressure on property cap rates and downward
pressure on real property values. Ongoing petrol price hikes go against
daily office working which could persuade more companies to reduce
office space requirements in the near term, placing further upward
pressure on office vacancy rates.
Retail centers focused more on non-essential goods and services such as eating
out and entertainment may battle too while smaller food and grocery-focused convenience centers may be less affected. On
the other hand, Loos anticipates the residential rental market to
strengthen as aspirant homebuyers ‘hold off’ while financial pressure
persists.
Knight Frank’s Prime Global Rental Index for Q1 2022 which
tracks movement in the luxury residential rental market across 10
cities, reveals that the average annual increase of 11.9% in prime rents
is at its highest since 2010. New York and London lead the rankings
with rentals up by 38.5% and 26.4% respectively while Hong Kong is the
only city included to have seen prime rentals decline over a quarterly
basis (1.1%) in the three months to March 2022.
Sirius Real Estate
has completed the disposal of BizSpace Camberwell in London for £16m,
representing a net initial yield of approximately 2.0% and a 94% premium
to the value at the time of its acquisition in November 2021. The
purchase of BizSpace enabled Sirius to enter the UK market for the first
time.
The Precinct,
an office development by Gateway Real Estate Africa, has received a
5-Star Green rating from the GBCSA, the first development in Mauritius
to receive this kind of rating. Currently, under construction, the build
will comprise a lettable area of 10 000m2 with 500 parking bays and
it will be anchored by Grit Real Estate, Dentons Law, and Workshop 17.
Deutsche Konsum REIT
has acquired six mainly food-anchored retail assets in Germany in
several transactions by notarial deeds for a purchase price of
approximately €9.2m with a combined rental area of +- 9 000m2.
During its current 2021/2022 financial year, the REIT has acquired 21
non-cyclical, mainly food-anchored retail assets for around €58.6m. Its Pro-forma portfolio currently comprises 170 properties with a total
lettable area of approximately 1.04 million sqm which generates annual
rent of €71.4m.
