According to Ridwaan Loonat , Nedbank ’ s Senior Property Analyst , the listed-property sector saw an average decrease in property values of roughly 2,8 % over the course of the year , which brings the total decrease in value since the start of the Covid-19 pandemic to around 10,5 %. A broad range of valuation changes were evident across the listed-property sector .
As in 2020 , the South African Property Owners Association ( Sapoa ) allproperty capitalisation rates continued to move upwards in 2021 ( 0,4 % in the first half of the year ) but here too , sectors were impacted differently , which contributed to the broad range of adjustments referred to above .
Valuations are expected to steady in 2022 and reductions will become more property-specific over the coming year . However , there is still uncertainty and downside risk evident in the market , particularly for offices where vacancies increased significantly over the course of last year .
That said , there are definite indications that office-based working remains important to many employers and employees alike . So , a wholesale move to remote working is not on the cards . In addition , some of the existing vacant space is also being used for office-to-residential conversions .
Claire Denny of Nedbank Property Partners has listed the following trends and opportunities in the various property sectors :
Locally Listed Property Funds Locally listed property funds continue to dispose of non-core assets , with this clearly still being regarded as an opportunity by various private sector players .
Also continues to show an interest in offshore acquisitions and developments ( more recently in the logistics space ), due to the perceived growth potential in some of the offshore jurisdictions , underpinned by the benefit of diversification and net operating income growth .
Hospitality Property Hospitality property prices have been extremely hard hit by the pandemic . Increased supply in this sector has been muted and , if optimism improves , it could see a recovery – a potential situation that is prompting interest among some investors .
Office-to-residential Conversions A number of office-to-residential conversions are being planned , or are in progress , with continued interest expected in well-located and reasonablypriced residential units that offer access to various facilities and amenities . Interest in these assets is linked , however , to affordability .
SA Real Estate Investor Magazine MARCH 2022 57