COMMERCIAL PROPERTY STOOD STRONG IN SPITE OF ROLLER COASTER 2015

It’s no surprise that the South African economy experienced a few hiccups over the past year, which had a knock-on effect across multiple sectors. In light of that, we thought it’d be interesting to research how the commercial property sector fared in 2015 - and our results might surprise you.

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In 2015, total transaction activity within the commercial property space came in at R118,5 billion, an impressive 12,8% increase from 2014 (which was sitting at R105 billion.)

Transaction activity of commercial properties between 2012 and 2015 was on a constant rise.
When looking at the transaction activity between unlisted and listed companies, there are some interesting points. The listed sector saw a 19.4% decline of transaction activity in 2015, but still saw them contributing a fair amount to overall commercial property transactions. In the listed company segment, Redefine was the most active listed property company with over R6 billion acquired in 2015. This is attributed to the fund acquiring a number of portfolios including the transfer of McSteel, Leaf and Barrow properties, a trend lately witnessed in the sector where large funds are targeting a portfolio instead of single properties.

Between 2014 and 2015, while the listed sector’s activity dipped slightly, the unlisted sector saw tremendous growth of 40%.

The reason the listed sector transaction activity has dropped is because vacancies have been rising, while rentals decreasing, resulting in a struggle to find the right nodes to transact in.

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When looking at transactions by geographical spread, Gauteng’s three biggest metropolitan municipalities accounted for 57.4% of the transaction values and, collectively, were the largest contributors to the overall sales activity in 2015.

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When it came to analysing lending market share, Nedbank came out tops. Nedbank continues to dominate the banking sector with over 33% market share, followed by Investec who hold 22.3%.

Absa had the greatest improvement in 2015, increasing its commercial property bonds by 117% to over R20 billion (compared to R9,2 billion in 2014). Standard Bank lending was lacklustre with a 1% decline in 2015.


The average bond per transaction in 2015 was R33.5 million – an increase from R28,7 million in 2014.


Overall, the quality of assets being funded seem to have improved, particularly for Nedbank which has reaffirmed its position in the market as the leading commercial property lender (for both market share and average bond per transaction) in the South African market, dominating a majority of the metropolitan areas. In 2015, Nedbank firmly led in four out of the five top metropolitan municipalities with Absa leading only in the City of Tshwane.

While no sector is safe when an economy and currency is as fickle as ours, the commercial property sector maintained a strong position throughout the year - in spite of the roller coaster that was 2015.

Should you be interested in commercial property investments, please call our commercial property
division on 0129914400.

(Extract from a Lightstone Property Newsletter of March 2016)

This article is a general information sheet and should not be used or relied upon as professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your financial adviser for specific and detailed advice. Errors and omissions excepted (E&OE)



CMV Group of Companies

Tel : 012 991 4400
Fax : 012 991 3001
Physical: 17 Midas Avenue, Olympus, Pretoria, 0081
E-mail: info@cmv.co.za

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