South Africa Real Estate Industry Analysis 2023: Remote Working is a Significant Driver of the Property Market, Increasing Demand for Properties in Areas Outside Major Cities

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Feb 20, 2024, 20:00 ET

DUBLIN, Feb. 20, 2024 /PRNewswire/ -- The "Real Estate Activities in South Africa 2023" report has been added to ResearchAndMarkets.com's offering.

The South African real estate market is fragmented and includes numerous local and global players. Property price growth has remained steady, including throughout the pandemic, although some subsectors, such as commercial properties, were significantly affected.

Listed property shares fell by more than 45% in 2020, before recovering. In commercial property, rental vacancies increased, and property valuations decreased. Property owners' operating costs are growing, and service delivery of local municipalities continues to deteriorate. Many commentators fear that the Expropriation Bill will lower investor confidence. Rental growth has been slower than the growth in house prices.

Investment in commercial real estate grew for the second consecutive year in 2021 but dropped by approximately 20% in 2022. In 2021, investment in the alternative property market (co-working offices, data centres, retirement homes, self-storage, student housing and cold storage) and hospitality sector (hotels, restaurants, entertainment facilities) increased, mainly at the expense of the industrial and commercial sectors.

Opportunities

Demand for environmentally-friendly and recycled furniture is growing.

High shipping costs favour flatpack furniture. Logistics challenges and higher shipping costs have made it more expensive to import, therefore favouring local manufacturing (nearshoring). Productivity SA's business turnaround and recovery programme is available to struggling companies. The designation of furniture for procurement by state entities. The hybrid work trend is driving demand for lighter, mobile home office furniture, as well as hot desk furniture.

Challenges

Any future global supply chain challenges could increase raw materials costs.

Competition from imports. Declining shipping fees and the falling oil price could make it more affordable to import than previously. Higher inflation has lowered consumer's ability to afford new furniture purchases. Increasing cost of electricity, water, raw materials, transport and labour. Loadshedding. Local logistics challenges make it expensive to transport goods and raw materials. The weak local and global economy will likely reduce sales and exports.

Trends

A shortage of higher-skilled employees. A shortage of local and imported raw materials. Declining investment in capital equipment. Inadequate investment in skills development. Insufficient research and development. Little design improvement or new product development.

Outlook

Uncertainty has caused some investors to hold back, and some international investors are selling as investor sentiment worsens. The Rode Report said the real estate market will be "stuck in low gear for years to come". Remote working will be a significant driver of the property market, likely increasing demand for properties that offer flexible working arrangements and those in areas outside major cities. More property owners and developers are looking for properties that are self-sufficient and sustainable.

Residential properties are likely to continue to perform well. Commercial property may face some challenges, particularly in city centres. Warehouses and logistics centres may perform well due to the growth of ecommerce.

Report Coverage

This report focuses on the real estate industry which comprises commercial, industrial and residential properties, as well as property development, property valuation and bond origination. It includes comprehensive information on values, purchase prices and transfers and rental and vacancy trends, developments and corporate actions of JSE-listed companies, developers and estate agents.

There are profiles of 123 companies including commercial property companies such as Growthpoint, Hyprop, Redefine and Vukile, developers such as Keystone, WBHO and Renprop, leisure resort and hotel developers including Southern Sun and Sun International and residential real estate companies such as Seeff, Rawson and Pam Golding as well as several valuation and bond origination companies.

COMPANY PROFILES - Commercial Property Investment and Management Companies

Accelerate Property Fund Ltd
Acsion Ltd
AFHCO Holdings (Pty) Ltd
Atterbury Management Company (Pty) Ltd
Beare Properties (Pty) Ltd
Broll Property Group (Pty) Ltd
City Lodge Hotels Ltd
Delta Property Fund Ltd
Dipula Income Fund Ltd
Emira Property Fund Ltd
Equites Property Fund Ltd
Eris Property Group (Pty) Ltd
Excellerate Real Estate Services (Pty) Ltd
Exemplar REITail Ltd
Fairvest Ltd
Fieldspace Property Managers (Pty) Ltd
Fortress Real Estate Investments Ltd
Free State Development Corporation
Growthpoint Properties Ltd
Hammerson PLC
Heriot REIT Ltd
Hermans and Roman Property Solutions (Pty) Ltd
Hyprop Investments Ltd
Industrials REIT Ltd
Inframax Holdings (Pty) Ltd
Ingenuity Property Investments (Pty) Ltd
Investec Property Fund Ltd
JHI Retail (Pty) Ltd
Legacy Hotels and Resorts (Pty) Ltd
Liberty Holdings Ltd
Maxprop Holdings (Pty) Ltd
Montagu Homes (Pty) Ltd
Oasis Crescent Property Fund
Oasis Crescent Property Fund Managers Ltd
Octodec Investments Ltd
Old Mutual Ltd
Orion Real Estate Ltd
Pareto Ltd
Passenger Rail Agency of South Africa
Public Investment Corporation SOC Ltd
Putprop Ltd
Rebosis Property Fund Ltd
Redefine Properties Ltd
Renprop (Pty) Ltd
Resilient REIT Ltd
RMG Management Group SA (Pty) Ltd
SA Corporate Real Estate Ltd
Sable Holdings (Pty) Ltd
Sanlam Ltd
Sargas (Pty) Ltd
Sirius Real Estate Ltd
Stor Age Property REIT Ltd
Strategic Real Estate Managers (Pty) Ltd
Texton Property Fund Ltd
Tourvest Holdings (Pty) Ltd
Tower Property Fund (Pty) Ltd
Tradehold Ltd
Trafalgar Property Management (Pty) Ltd
Visual International Holdings Ltd
Vukile Property Fund Ltd
Zenprop Property Holdings (Pty) Ltd

COMPANY PROFILES - Property Developers

Abland Investment Holdings (Pty) Ltd
Acsion Ltd
AFHCO Holdings (Pty) Ltd
Atterbury Management Company (Pty) Ltd
Eris Property Group (Pty) Ltd
Free State Development Corporation
Group Five Ltd
Growthpoint Properties Ltd
Ingenuity Property Investments (Pty) Ltd
Investec Property (Pty) Ltd
Keystone Investments (Pty) Ltd
Montagu Homes (Pty) Ltd
Rabie Property Group (Pty) Ltd
Renprop (Pty) Ltd
RPP Developments (Pty) Ltd
Summercon Holdco (Pty) Ltd
Swish Property Group (Pty) Ltd
TCI Properties (Pty) Ltd
Tongaat Hulett Developments (Pty) Ltd
Visual International Holdings Ltd
WBHO Construction (Pty) Ltd
Westbrook Residential Development (Pty) Ltd
Zenprop Property Holdings (Pty) Ltd
Zotos Brothers (Pty) Ltd

COMPANY PROFILES - Sustainable Human Settlement (Previously RPD Housing)

Calgro M3 Holdings Ltd
Inframax Holdings (Pty) Ltd
Nu-Way Housing Developments (Pty) Ltd
Power Development Projects (Pty) Ltd
Trustgro Developments (Pty) Ltd

COMPANY PROFILES - Development of Leisure Resorts and Hotels

City Lodge Hotels Ltd
Kat Leisure (Pty) Ltd
Legacy Hotels and Resorts (Pty) Ltd
Peermont Global (Pty) Ltd
Southern Sun Ltd
Sun International Ltd

COMPANY PROFILES - Industrial Development Zones

Atlantis Special Economic Zone Company SOC Ltd
Coega Development Corporation (Pty) Ltd
East London Industrial Development Zone SOC Ltd
Richards Bay Industrial Development Zone Company SOC Ltd

COMPANY PROFILES - Residential Real Estate

AIDA National Franchises (Pty) Ltd
Electronic Realty Associates (South Africa) (Pty) Ltd
Everybody Wins Real Estate Franchising (Pty) Ltd
First Realty Central (Pty) Ltd
Firzt Realty (Pty) Ltd
Geffen International Realty Franchises (Pty) Ltd
Jawitz Properties (Pty) Ltd
Just Property Group Holding (Pty) Ltd (The)
Leapfrog Property Group (Pty) Ltd
My Africa Properties (Pty) Ltd
Pam Golding Properties (Pty) Ltd
Property Referral Network (Pty) Ltd
Rawson Residential Franchises (Pty) Ltd
Realty One International Property Group (Pty) Ltd
Seeff Property Services (Pty) Ltd
Wakefields Real Estate (Pty) Ltd

COMPANY PROFILES - Property Valuations

Appraisal Corporation CC
Broll Valuation and Advisory Services (Pty) Ltd
Cape Value (Pty) Ltd
Corporate Valuations CC
DDP Valuers (Pty) Ltd
Eris Property Group (Pty) Ltd
Magnus Penny Associates CC
Mills Fitchet
Rode and Associates (Pty) Ltd
S A Appraisers and Valuers CC
Spectrum Valuations and Asset Solutions (Pty) Ltd

COMPANY PROFILES - Bond Origination

BetterHome Group Ltd
Intelligent Debt Management (Pty) Ltd
MultiNET Home Loans (Pty) Ltd
Ooba (Pty) Ltd

COMPANY PROFILES - Medical Real Estate

Benchmark Group (Pty) Ltd
Gap Infrastructure Corporation (Pty) Ltd
Giflo Holdings (Pty) Ltd
Growthpoint Healthcare Property Holdings (RF) Ltd
Life Healthcare Group Holdings Ltd
Netcare Ltd
Orbvest SA (Pty) Ltd
Mediclinic Group Ltd

For more information about this report visit https://www.researchandmarkets.com/r/bp8vma

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