South Africa Real Estate Report

Published 10 August 2015

  • 59 pages
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$1,295.00
South Africa Real Estate Report

BMI View: While concerns about economic performance and a deteriorating business environment are leading to a slowdown in investment, the developed nature of South Africa's economy as a whole and its and commercial real estate sector will mean that the sector continues to see investment and activity. Corporates will continue to seek premium office space, while development of new retail facilities across the country reflects rising incomes and long-term optimism about the sector. Meanwhile, the industrial real estate sub-sector is seeing increasing investment as property funds seek to diversify their interests away from a traditional focus on office and retail space.

Economic growth in South Africa has been slowing, with GDP growth of 1.5% in 2014, down from 2.2% in 2013. While we see this rising to 1.9% in 2015, growth will be muted over our forecast period to 2019, reaching only 2.7% that year. This below-potential growth reflects uncertainties in the economy that are causing investment to fall. High electricity prices are causing high inflation, and investors fear a rise in interest rates. Meanwhile, electricity blackouts are creating costs and uncertainties for business, as is labour unrest, while the government's unwillingness to make necessary market reforms is a further deterrent to investors. However, South Africa remains by far the most developed economy in the continent, and is a significant exporter and importer.

Johannesburg has a highly developed office real estate market, as it is home to a globally significant financial services industry. The city's developed retail market means that there are opportunities for retail and industrial developers are good. The port city of Cape Town's status as South Africa's second city, means that it has a strong commercial real estate market across the three sub-sectors that we cover. Durban, only slightly smaller than Cape Town, is also a port city and a significant manufacturing centre, likewise with a...

BMI Industry View
7
SWOT
9
Political
11
Economic
12
Operational Risk
13
Industry Forecast
15
Office Real Estate Forecast
15
Table: Office Rental Rates, 2010-2015 (per sq m per month)
17
Table: Office Yields, 2010-2019 (%)
17
Retail Real Estate Forecast
19
Table: Retail Rental Rates, 2010-2015 (per sq m per month)
21
Table: Retail Rental Yields, 2010-2019 (%)
21
Industrial Real Estate Forecast
23
Table: Industrial Rental Rates, 2010-2015 (per sq m per month)
25
Table: Industrial Rental Yields, 2010-2019 (%)
25
Residential/Non-Residential Building - Outlook And Overview
27
Table: Residential and Non-Residential Building Industry Data (South Africa 2013-2018)
27
Table: Residential and Non-Residential Building Industry Data (South Africa 2019-2024)
27
Residential/Non-Residential Building - Outlook & Overview
27
Table: Planned Special Economic Zones
31
Major Projects Table - Residential/Non-Residential Building And Social Infrastructure
33
Table: Major Projects
33
Macroeconomic Forecasts
37
Economic Analysis
37
Table: Economic Activity (South Africa 2010-2019)
41
Industry Risk Reward Ratings
42
Industry Risk/Reward Index
42
Table: South Africa Real Estate Risk/Reward Index
42
Rewards
42
Risks
43
Market Overview
44
Competitive Landscape
46
Property Developers
46
Property Managers And Funds
47
Demographic Forecast
50
Demographic Outlook
50
Table: Population Headline Indicators (South Africa 1990-2025)
51
Table: Key Population Ratios (South Africa 1990-2025)
51
Table: Urban/Rural Population & Life Expectancy (South Africa 1990-2025)
52
Table: Population By Age Group (South Africa 1990-2025)
52
Table: Population By Age Group % (South Africa 1990-2025)
53
Methodology
55
Industry Forecast Methodology
55
Sources
56
Risk/Reward Index Methodology
57
Table: Real Estate Risk/Reward Index Indicators
58
Table: Weighting Of Indicators
59

The South Africa Real Estate Report features BMI Research's market assessment and independent forecasts of major construction projects in the residential and commercial markets, plus rental prices and yields in major cities. The report critically analyses the prospects for real estate within the broader economic and financial context - both domestic and global - via our econometrically-modelled and clearly explained banking and economic forecasts and follows this through to evaluate the implications for REITs.

BMI's South Africa Real Estate Report provides industry professionals and strategists, sector analysts, business investors, trade associations and regulatory bodies with independent forecasts and competitive intelligence on the real estate industry in South Africa.

Key Benefits

  • Benchmark BMI's independent real estate industry forecasts for South Africa to test other views - a key input for successful budgeting and strategic business planning in the South African real estate market.
  • Target business opportunities and risks in South Africa through our reviews of latest industry trends, regulatory changes and major deals, projects and investments.
  • Assess the activities, strategy and market position of your competitors, partners and clients via our company profiles (inc. SWOTs, KPIs and latest activity).

Coverage

BMI Industry View

Summary of BMI’s key industry forecasts, views and trend analysis covering real estate and construction, regulatory changes, major investments and projects and significant national and multinational company developments.

Industry SWOT Analysis

Analysis of the major Strengths, Weaknesses, Opportunities and Threats within the real estate sector and within the broader political, financial, economic and business environment.

Industry Forecasts Outlook

Historic data series (2010-2013) and forecasts to end-2019 for the domestic real estate industry and for the local and global finance industry.

Indicators Include:

  • Real Estate: Office, retail and industrial real estate yields for all major cities (%); short term forecasts on minimum and maximum real estate rental prices by sub-sector (USD per square metre and local currency per square metre).
  • Construction: Industry value (USDbn); contribution to GDP (%); employment (‘000); real growth (%).
  • economy: Economic growth (%); nominal GDP (USDbn); unemployment (%); interest rates (%); exchange rate (against USD).

BMI’s Real Estate Risk Reward Index

BMI’s Risk Reward Indices provide investors (real estate vendors, construction companies and financial investors) looking for opportunities in the region with a clear country comparative assessment of a market’s risks and potential rewards. Each of the country markets are scored using a sophisticated model that includes more than 40 industry, economic and demographic data points to provide an indices of highest to lowest appeal to investors, with each position explained.

Market Overview

Overview of the real estate sector, including analysis of existing/planned real estate developments and emerging industry trends in the office, industrial and commercial sectors

Market Analysis

Features detailed city-level data and analysis on rental prices, yields, contract terms and real estate availability with separate chapters covering the office, retail and industrial sub-sectors.

Company Profiles*

Examines the competitive positioning and short- to medium-term business strategies of key industry players. Strategy is examined within the context of BMI’s industry forecasts, our macroeconomic views and our understanding of the wider competitive landscape to generate Company SWOT analyses. The latest financial and operating statistics and key company developments are also incorporated within the company profiles, enabling a full evaluation of recent company performance and future growth prospects.

*Company profiles are not available for every country. Those reports instead contain information on the current activities of prominent companies operating in the market.

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