Despite a series of tumultuous years, property is still a good investment in South Africa, with expected returns of between 10% and 15% for 2023, says Broll Property Group.
Broll said the property sector faces another interest rate hike this week, and it remains a tough environment to operate in. However, opportunities for investors and landlords are still present in the market – especially in the commercial real estate sector. Although office occupancy has not fully recovered to pre-pandemic levels, there have been some changes in certain areas, he said. One significant change is that high-quality office spaces were the first to be rented, albeit at lower prices than before the pandemic.
There will probably not be any major speculative development for a while, he said. There may, however, be some development in particular nodes.is currently where most developments will land up, particularly when it comes to pricing, said Broll. “Activity is picking up in the industrial sector, and there is a flattening in demand for logistics buildings. What we are also noticing is greater demand for alternative investments, including data centres, hospitals and student accommodation,” said Long.Rising rates and taxes have made it increasingly more expensive to be a landlord, especially with the need for alternative power supplies and increased security measures.