Financial Data
Updated 21 Nov 2017


SA’s property market nears R6 trillion and why it’s still worth investing in

The local property industry is on the rise. Here’s how you can get in on the action by servicing one of the country’s most lucrative up-and-coming regions. 


Diana Albertyn, 14 April 2017  Share  0 comments  Print


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While the local economy remains challenging for property investors to navigate, did you know that the size of South Africa’s property market has risen by nearly a trillion rand in the past five years?

According to the latest research from the Property Sector Charter Council (PSCC), R520 billion of the R5.8 trillion total land in South Africa has been officially zoned for commercial and industrial development. If you’re considering putting more money in property, now is a good time to invest.

Related: Smart commercial property pricing can give you a competitive edge in 2017


TAKE NOTE

According to the Property Sector Charter Council’s report, commercial property carries a value of around R1.3 trillion, up from some R780 billion since its inaugural report in 2010. “The local investor is still very well-placed to take up opportunities in these uncertain economic times and while we are facing challenges with little or no economic growth, property always finds a way to increase in value over time,” says Norman Raad, CEO of Broll Auctions & Sales.


SA property is flourishing on many fronts. The PSCC report puts residential property on top, which included informal settlement for the first time in the study, but below is a breakdown of the top-performing sectors in commercial property.

If you’re looking for region to invest in, the coal-mining town of eMalahleni, as an example, is booming: 

Retail space growth

 Retail -space -growth

Of the R1.3 trillion that the local commercial property sector is worth, R534 billion is owing to the retail sector. eMalahleni’s colossal Highveld Mall is the biggest in Mpumalanga, making the town the retail hub of the province. Added retail space, though, is needed to service the region’s growing population. 

“With a diversified economy, this remains one of South Africa’s fastest growing towns, which is also strategically well positioned en route from Gauteng to Kruger National Park,” says Elisme Swart, area principal for Pam Golding Properties. “A constant influx of contractors and other people to the mines and numerous industries operating in the area sustains ongoing, buoyant activity in eMalahleni’s retail property sector.”

Many major national retailers are already tenants in the Highveld Mall’s sought-after retail space that services all the surrounding towns. According eProperty News the space is popular among owner-occupiers and property investors alike and represents a worthwhile destination for you to look at for investing. 

Related: Cape Town’s billion-rand project should get you thinking differently

Industrial space growth 

Accounting for R281 billion in total value, industrial property is another strong sector to consider. In eMalahleni: “In the industrial property market, lots of investors are taking the opportunity to invest in well-priced properties, with light and heavy industrial experiencing the most demand. These range in size from 1 200m2 to 10 000m2 at prices varying from R2 million to R15 million,” adds Swart. 

Not only does property play a big role in the country’s GDP, but the industrial sector could expand your investment portfolio significantly. Whether you decide to invest in retail space or industrial property, eMalahleni appears to be a worthwhile bet in property investment, but you can consider alternatives. You can contact Standard Bank’s commercial property experts for further information on other regions you might be interested in.


KEY TAKEAWAYS

  • Retail property is bringing in the largest value in the commercial property sector in Mpumalanga’s retail hub eMalahleni.
  • Industrial properties are well-priced for both light and heavy industry use. It might be just the right time for you to consider the region as a worthwhile investment. 
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Diana Albertyn


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