| The year 2008 saw many grief stricken property | | | | to yield rises across all sectors. The UK experienced |
| owners pulling out their hair in disbelief as the world | | | | nominal returns of -22.1% and Ireland -34.2%, a |
| markets came crashing down around them. The UK, | | | | staggering loss in comparison with the 13% increase |
| USA, Europe and China were worst affected with | | | | of South African commercial property. Continental |
| inflation pushing many people’s income to stretch | | | | Europe achieved varied returns from commercial |
| further than ever before, especially to cope with | | | | property in 2008 whilst Asia suffered a staggering |
| debt repayment and the loss of value of fixed | | | | loss in comparison to last year’s returns. South |
| assets. | | | | Korea saw a drop from 26.7% in 2007 to 4.0% in |
| South Africa did not escape unscathed and the | | | | 2008. North America achieved returns of 3.7% and |
| population has definitely felt the sting of increasing | | | | Australia 1.3%. |
| food prices and inflation. Inflation grew to 11.5%, a | | | | Offices and industrial spaces achieved returns of 9%, |
| major increase for a time frame as short as a year. | | | | whereas retail property made returns of 7.8% |
| The property market was reported as having | | | | producing an average income return of 8.3% for all |
| ‘crashed’, leading to a major drop in | | | | property. The cause of the positive returns has been |
| property prices. Nominal returns on property values | | | | linked to the pricing structure and financial markets in |
| dropped far below the 27.5% which 2007 yielded and | | | | South Africa remaining somewhat stable. Even though |
| were the lowest recorded since 2002. Equities and | | | | the inflation rate of 11.5% has caused prices to soar, |
| property equities suffered a defeating -23.2% loss in | | | | the effects were not felt nearly as heavily as in the |
| 2008 whilst the JSE PLS Index returned -2.3% and | | | | UK, USA and Asia. Robust and capital income growth |
| the JSE PUT Index returned -9.7%. | | | | was positive throughout 2008 and whilst consumer |
| These statistics may seem unsettling but South | | | | confidence was a little threatened, commercial |
| African property did perform somewhat in 2008, | | | | property investment was made to a far greater level |
| especially in comparison to other countries’ real | | | | than in other countries. |
| estate markets. Despite the comparatively low yields | | | | The positive returns on commercial property |
| on investments, the commercial property market has | | | | investments during 2008 in South Africa are a clear |
| surprised many with far greater nominal returns than | | | | indicator that the property market in South Africa |
| in other countries. Property developers and financial | | | | has a greater stability than elsewhere in the world. |
| consultants warn that while the yields of 2008 are | | | | Despite the comparative drop to last year’s |
| far less than 2007, the returns made have been | | | | property returns, and the influence the recession has |
| satisfactory, especially considering the global financial | | | | had on world property markets, South Africa’s |
| crisis. | | | | commercial property marketing has emerged |
| The Sapoa/IPD Property Index has revealed that | | | | successfully. Buying commercial property at this time |
| investments in South Africa’s commercial | | | | is a lucrative investment as prices are lower than |
| property market produced a nominal return of 13%. | | | | average but the return is still positive and fixed |
| This double digit figure is the highest in world | | | | assets are not depreciating in value. |
| commercial property for 2008. Despite the inflation | | | | The year 2008 saw many grief stricken property |
| rate taking this percentage to only a 1.3% increase | | | | owners pulling out their hair in disbelief as the world |
| from 13%, the return is a positive reflection of the | | | | markets came crashing down around them. The UK, |
| greater financial stability of South Africa and | | | | USA, Europe and China were worst affected with |
| especially its property markets when measured | | | | inflation pushing many people’s income to stretch |
| against other countries in Europe, Asia and the USA. | | | | further than ever before, especially to cope with |
| The UK and Ireland were heavily affected by the | | | | debt repayment and the loss of value of fixed |
| recession in 2008 with property values dropping due | | | | assets. |