JLL - 2018 South African Investment Review
Investor confidence in South Africa was bound to improve in the beginning of 2018 as Cyril Ramaphosa took over as president. Investment activity recovered notably in the year with transaction activity reaching R19 billion from just R11.6 billion in 2017. Office investments dominated the market with R10.3 billion invested in over 58 properties. However, notable growth was recorded in all real estate sub-sectors.
In contrast to previous years, the retail sector saw a 7.4% y/y decline in investments in 2018, at a total of R4.2 billion worth of assets. Retail assets remain sought after in the market and stock is lower than demand in terms of investment activity. However, we have noted subdued interest from investors with regard to stock that is currently available for sale. Activity remained concentrated in much smaller retail accommodation, with the largest being small regional shopping centres of up to 50,000m², while large retail malls (regional and super-regional malls) remained off the market.
In the industrial sector, the average value of deals improved notably from 2017, with evidence that average yields declined. This is an indication
that the sell-off in assets seen in previous years to improve distressed balance sheets may have come to an end. The sector also saw a notable increase in non-listed transaction activity in 2018, a possible display of improved investor confidence among SMMEs in manufacturing and logistics