Commercial space supply has slowed - Stats SA
2006-03-20
Less new commercial property space - offices, industrial and retail space - has come on to the market in recent months.
According to building statistics released this week by Statistics SA, the amount of office space completed in terms of square metres rose 78,1% year-on-year in January, with 12,023m² of space coming to market.
But office space completed for the three months to January actually declined 51,5% compared to the total space completed for the three months to October last year, said First National Bank property strategist John Loos on Thursday.
Loos said shopping space completed declined "mildly" - 20% - comparing the three months to January this year with the three to October last year.
Industrial and warehouse space completed in terms of square metres declined 27% if the three months to January were compared with the three months to July, he said.
"There has been a slowdown."
Loos said this may be in part attributed to the economy slowing down for two quarters of last year, as well as to the January period with its reduced building activity.
December and January are traditionally quiet.
But Loos said he believed the decline in new space coming on to the market was temporary and that building activity in the commercial property sector would boom for the rest of the decade.
The commercial property market was supported by the fact that the number of building plans passed for this sector last year had surged and that industrial and office property vacancies had declined in recent years.
Property economist Erwin Rode said the dip in building space completed was due to seasonal factors and that he agreed with Loos about commercial property's prospects.
"Retail has already had a long run. Offices must still get out of the starting blocks but I am expecting offices to be better performers," said Rode.
Source: eProp - www.eprop.co.za
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