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| Johannesburg Targets Black and Female Investors |
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More than R1,7-billion has been invested in property refurbishments and construction in the inner city since Johannesburg launched a drive to regenerate the area in October 2004
To complement this, the City is calling on black economic empowerment (BEE) and female investors to take advantage of the inner city's bright economic climate and participate in its efforts to reverse the negative economic trend that characterised the area during the 1990s.
Speaking at an urban development zone (UDZ) seminar attended by business people on Wednesday, 4 April, the acting executive director in Joburg's Department of Economic Development, Jason Ngobeni, said the revitalisation of the inner city was a key City priority.
| Johannesburg News Agency, 10-04-2007 |
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| South African Property Continues to Play in the Top League |
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The South African commercial property market achieved total returns of 26.7% in 2006, the second highest annual return since the start of the index in 1995
This strong result was below the 2005 overall property return, which was at 30.1%, signalling a levelling of a very strong property cycle. These results were released by IPD (Investment Property Databank) in Johannesburg, Cape Town and Durban at events sponsored by RMB Properties (Pty) Ltd.
"The three-year annualised return for commercial property is 26.7%, equivalent to the total return of 2006, and the five-year annualised return is a sturdy 20.8%", said Managing Director of IPD South Africa, Stan Garrun.
Equities and property loan stocks outstripped the direct property index at 41.2% and 33.8% respectively, but direct property achieved better returns than the property unit trusts at 16.2% and bonds at 5.5%. Over a 12-year period property marginally outperformed equities at 15.8% vs. 15.6%.
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| Foreign Focus On South Africa Commercial Property |
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A largely untold aspect of the commercial and industrial property boom of the moment is growing foreign interest and investment in South Africa
The number of purchases of South African commercial and industrial property by foreign buyers is believed to have exceeded that of residential property.
Andrew Bradford of property consultancy Bradford McCormack explains: "Much has been made of the growing foreign demand for residential real estate in SA, but estimates are that these sources actually account for less than 1% of all such transactions.
"On the other hand, while no official figures are available, anecdotal evidence and our own experience points to the fact that the number of acquisitions by foreign owners of both commercial and industrial property exceeds that percentile."
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| 2006 Highs in Commercial Building |
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According to John Loos, property strategist for FNB Commercial Banking, the release of December building statistics by StatsSA for the year 2006 reported that the real value of building plans passed reached the highest level on record, and probably safe to say the highest level ever, finally surpassing the previous record set in 1982 around the gold boom period.
For 2006 in total, StatsSA figures showed a 21% rise in the real value of total commercial building plans passed, reaching an all time high level. "The real value of commercial building completions has some way to go to passing its previous record set in 1985, but nevertheless rose again, by 21,8%, the fourth successive year of increase in real terms. Judging by the gap being opened up between the real value of plans passed versus completions, it would appear that the rising long term trend in real value of completions has some years to go," says Loos.
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| Industrial Property Still Steaming Ahead |
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Strong economic growth and rising building costs and low vacancy rates ensured that the industrial property market kept up its grand performance during the last quarter of 2006
This is according to the latest issue of the authoritative Rode's Report on the South African Property Market.
Nominal rentals in all the major industrial conurbations recorded double-digit growth during the fourth quarter of 2006. What's more, rental growth was higher than building-cost inflation over the same period, meaning that rentals grew in real terms as well.
Capitalization rates - the property equivalent of the forward earnings yield of shares - showed a marginal up-tick in the final quarter of 2006; this should be viewed as a cyclical upward fluctuation around a long-term downtrend which has been in play since 2003, says Rode & Associates CEO Erwin Rode.
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| 2010 FIFA World Cup - Opportunities and Pitfalls |
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The 2010 FIFA World Cup South Africa has become the driver for infrastructural change within our country, the upgrading of Eskom, the announcement of new and upgraded airports and lots more
Leading up to 2010, the government has committed to an infrastructural investment of R410 billion and during 2010, visitors will spend over R10 billion in just 4 weeks. This event is about more than four weeks of soccer, it is also about the impact that it will have on all business sectors, pre- and post the event. No sectors will be more influenced than that of the property and construction industries.
Plenty of opportunities will arise for both sectors, which will lead to significant profits to be made – if, however, a conservative and sensible approach is taken. Consider the projected billions that will be spent on upgrading, improving and creating new infrastructures leading up to 2010 on projects such as the Gautrain and five magnificent stadiums being built in major cities around South Africa – all signs that construction is definitely experiencing a boom. Even after 2010, Coega will be fully underway, the mining industry should continue showing growth.
| Madison Property Fund Managers - Property Innovation, 20-03-2007 |
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| It is R1billion Boom-Time in Buffalo City |
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An unprecedented building boom pushed the value of building plans passed by the Buffalo City Municipality last year to over R1billion for the first time in history
Property experts say the boom has been fuelled by new housing and shopping centre developments as well as investment flowing into the East London Industrial Development Zone.
The total value of 2006's plans was a touch over R1 billion compared to 2005's R708 million. And they predict more to come this year.
Explaining the 41 percent increase over 2005, BCM mayor Zintle Peter said the city was experiencing a period of positive growth not seen in decades.
"There are many factors responsible for the building boom, including a stable macro-economic environment and low interest rates, but I am heartened by the people of Buffalo City who are now confident to invest in the property market," she said.
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| South Africas Biggest and Most Profitable Shopping Centres |
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More than a million square metres of new shopping space is currently planned or under construction in the country and half of it is in Gauteng
The conditions driving this boom in shopping centres and making others extremely lucrative are set to continue.
According to the latest statistics from the South African Council of Shopping Centres (SACSC), 24 shopping centres with a total area of 553 000m² are being developed in Gauteng.
In addition, the SACSC states that South Africa currently has shopping space of 0,3m² per capita, compared with about 2m² per capita in the US, Britain and countries in Europe.
"This indicates that South Africa still has huge potential for the further expansion of shopping space," said Absa's senior economist, Jacques du Toit in the bank's latest residential property perspective.
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| Property Industry Welcomes Budget |
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Players in the property industry have welcomed Finance Minister Trevor Manuel's Good News Budget
In addition, R11 billion will be spent on social housing, while teachers' salaries are to increase by R8 billion. Both these factors will boost the property market, because teachers, as a consumer segment, are a very important house-buying segment.
This is indeed a good news budget by any standard. Government expenditure, coupled with powerful economic growth and tempered inflation will augur well for house sales and rises in house prices during 2007 and beyond.
In turn, rentals continue to rise at more than 8% per annum. This will assist investors who are currently required to subside costs of property by as much as 30%, in the form deposits, in order to break even.
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| Debts, Loans In The Property Industry |
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Property has a proven track record for being a solid investment and potential investors should not fear raising debt to acquire properties.
According to Standard Bank economist Elna Moolman, the question of whether to raise debt or not should depend upon an individual and his specific situation. "However, it is relatively comforting that interest rates are not likely to rise any further for the time being," she says. "So if an investor can afford a mortgage at these rates, there is not much risk further down the line."
Dennis Dykes, chief economist for Nedbank, agrees that a positive spin off from the latest round of interest rate hikes is that they enable investors to more realistically gauge the affordability of property. "Counter to that though is that when interest rates go up, there is less price performance in the ensuing period," he says. "This is not necessarily the case, but as affordability becomes an issue, it does tend to moderate price performance – at least in the short term."
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