In his review of prospects for real estate next year, Weil says that he also expects foreign investment in the listed property sector to increase.

“If international investors apply international norms pertaining to yields, then the current values in the listed property sector could still incorporate a premium in capital values over and above the effects of growth in earnings in 2007, which should average about 8%,” he says.

“If this interest materialises then one can expect the 2% of foreign ownership in the sector to start growing more rapidly.”

But he says this does not address the relatively small size of the listed property sector in international terms at R65bn.

Larger and more liquid property funds are needed in the sector. “Therefore one can still expect to see a number of mergers and takeovers within the sector.”

Weil says international investors have noted the acquisition of the Victoria & Alfred Waterfront for R7bn and are also likely to be looking at other substantial property prospects, especially in integrated precincts which incorporate the live, work and play elements.