Real Estate Investor Magazine South Africa October 2013 | Page 48

SMART MOVES

BY ANGIE REDMOND

Your Property Plan
Where are the real returns?

T

he South African rand value
has dropped by more than 10%
since May 2013 according to an
article written by the Financial Times.
With violent labour unrest in the
mining sector and continued strikes
and interruptions in production, the
South African economy has taken
some hard knocks, and the expected
growth of the economy has slowed and
is continuing to slow.

6.0

5.3

5.5

RGDP

5.0
4.0

Forecast

3.6

3.5

3.1

3.0

2.5

2.0
1.0
0.0
-1.0
-1.5

-2.0
2005

W hat does t h is mea n for t he
commercial property market? Essentially all
industries including the property industry will
experience slow growth, as the slow growth
of the economy filters through in the demand
for rentals and new developments. Companies
cannot afford higher rentals or to invest in
their own properties, their ability to do so is
hampered by the slow growth of the South
African economy. As f inancial constraints
become a reality, growth in disposable income
and consumption expenditure slow down,
46

5.6

October 2013 SA Real Estate Investor

2006

2007

2008

2009

2010

2011

GDP Growth
Baseline scenario
% ch.
2012

2,5

2013 (forecast)

2,4*

2014 (forecast)

3.3*

2015 (forecast)

3,8*

Forecasted by Rode

2012

3.0
2.0

filtering through to the property
market. The graphs to the left
illustrate the slowing growth.

REITs

The R EIT str uct ure, which
became available to the South
African property sector earlier
this year, was lauded by many
who saw thi ???????????????)???????????????????????????%?)???????????????????????????(????(????)?????????????????????????)??????????????????????????????????)????????????????????????????)A????
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