Western Cape leads commercial property recovery
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Loading... - Gloria Desmond
- 02 May 2023
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A total of R16.7bn of direct investment in the property sector was reported nationally, with the Western Cape and Gauteng markets driving the transactions. According to the recently published Jones Lang LaSalle’s (JLL) South African Real Estate Investment Review and Outlook for 2022/23, although total property investment in 2022 fell short of 2021, the Western Cape has experienced a surge in investment activity, with a total just shy of R3.9bn recorded. This is a 66% improvement on the previous year.
The JLL report reviews commercial property investment activity across Office, Industrial, Retail and Alternative, Living & Hospitality markets in South Africa.
Mieke Purnell, Research Manager at JLL says that, "All in all, and despite the macroeconomic and geopolitical challenges faced globally the commercial property market in South Africa fared relatively well in 2022, with strong performance emanating from the Western Cape."
Sectoral performance varied in 2022, including robust performance within the Industrial sector, a slower than expected recovery in the Retail sector, and a lagging recovery in Offices. Alternatives, Living, and Hospitality sectors also gained market share in comparison to previous years. The total geographical investment spread for Gauteng and Western Cape across all these sectors over the last two years is reported by JLL as follows:
| 2021 | 2022 | |
| Gauteng | 68% | 52% |
| Western Cape | 11% | 23% |
A large portion of the transactions occurred in the Industrial Sector, with R6.1bn reported for 2022, a mammoth 41% increase on the previous year. Approximately R2bn of these investments occurred in the Western Cape, while Gauteng fell to levels close to R2.5bn. Commenting on the report, Kim Pfaff-Karg, Chief Investment Officer of Cape-based Spear REIT Limited, who are the only regionally focused REIT listed on the JSE said, “Although Gauteng still accounts for the lion’s share of investment; the figures show a progressive decline in Gauteng since 2020, while the Western Cape has soared. The Western Cape is a magnet-market, being the key migration destination for both people and companies, in search of a more attractive and economically viable location." Read More…
