The information in this article is courtesy of iAfrica (Rental Growth Concern - 27 March 2009).
According to Rode’s Report on the SA Property Market for 2009, the global economic crisis is causing a slowdown in demand for office space. This, in turn, is causing concern over the moderate rental growth in the country.
John Lottering feels that there is no need for concern yet, as decentralised nodes in Durban, Pretoria and Cape Town are still showing nominal rental growth above the growth in rental costs.
However, the first quarter of 2009 also found that the economic times facing the retail trade has put severe pressure on the market. So far only Durban’s nominal rentals exceeded expectations, while Port Elizabeth’s poor performance showed rentals contracting by one percentage point mainly due to the difficulties faced by the region’s motor vehicle manufacturing industry.
Flat rentals were just as unimpressive when compare to consumer inflation with no relieve foreseen in the near future, even with recent interest rate cuts and the promise of more relief during 2009.
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