JLL, one of the world’s leading real estate investment and advisory firms, today released its Q1 South Africa Real Estate Market Performance report which outlines the implications that Covid-19 will have on major sectors across the country.
According to the report, most real estate sectors across the market have softened with the exception of the industrial sector, which has recorded a strong performance in Q1 2020.
Industrial property continues to look positive
Adapted from an article by eProperty News
As travel restrictions, the closing of non-essential businesses, and mass cancellations of events has significantly slowed economic activity in South Africa, traditional retail, heavy industry and the hospitality sector have been hit the hardest. The International Monetary Fund (IMF) anticipates the effects of Covid-19 will force the global economy to contract by 3% in 2020, whilst emerging markets are expected to contract by 1%.
Emerging economies are anticipated to bounce back stronger than leading economies, with GDP predicted to grow between 4% and 6% in 2021. Although Covid-19 will have significant impacts on the global economy over the short to medium term, long-term structural shifts may be less severe.
“Whilst some of the more resilient leading economies have been able to stabilize amidst the global pandemic, many emerging markets have been adversely impacted by compromised global supply chains and South Africa is no exception,” said Michael Scott, Research Analyst, JLL, Sub-Saharan. “With slowed economic growth and rising debt obligations, South Africa’s debt to Gross Domestic Product (GDP) ratio is expected to reach 70% by the end of the year, so the implications on local businesses is significant. Many are going to be forced to scale down and reduce spending.”
Good news for industrial property
The Industrial sector space remains strong, with year-on-year capital growth backed by low vacancy rates (3.4% national average). There is now a growing demand for warehouse and distribution space due to the significant growth in online retail sales from a relatively low base. E-commerce is expected to strengthen as consumer preference and behaviors change, with increased market penetration as a result of more accessible and affordable technologies.
Ballito – Capital of KZN’s North Coast
North Point Ballito is situated in the heart of the Northern Urban Development Corridor, one of Africa’s fastest growing commercial and residential centres and a significant concentration of wealth on the continent. Ballito’s proximity to King Shaka International Airport, a key driver of the new economic growth, has positioned the town as the unofficial capital of the North Coast.
Designed for doing business tomorrow
North Point Ballito is one of the few commercial sites situated within Ballito’s town limits, providing investors in the estate with a captive audience of affluent residents and tourists. With flexible zoning and a master planned approach to the design of the space, North Point Ballito offers a secure, easily accessible and architecturally consistent business environment, with serviced platforms to suit businesses of almost any size and concept.
Local or global, North Point Ballito is positioned for success
Located between the R102 and N2 at the Shaka’s Head interchange, North Point Ballito offers immediate access to major roadways that offer access to Durban Harbour, Richards Bay and the KZN interior. With a large pool of skilled talent within the immediate surrounding areas and three global gateways into Africa only minutes in every direction, the estate offers astute businesses in the technology, trade and logistics industries a tactical position that will be a key competitive advantage in future.
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