Covid-19 continues to cause severe strain on the listed property market, where no property Group has escaped its impact.

The sector at one stage traded 40% down from its early 2020 high. Fortunately, some recovery has begun but property levels are still well below historical highs.

The effect on profitability and portfolio values have been substantial, particularly in the retail and commercial market.

The over supply of office space, particularly in Sandton and Rosebank, was worsened by a pipeline of new developments.

After the pandemic broke, with its devastating impact on lives and livelihoods, as well as an increase in fibre rollout, the office market was further exposed in respect of space needed.

The direct effects of the pandemic in terms of rental relief and discount packages granted to tenants has had a huge impact on all segments of the property market. Rentals have been substantially reduced for the periods March 2020 through to July 2021 and for some tenants still effected by Stage 4 of the lockdown imposed by government, this will continue for a unknown period. Lease renegotiations have become a necessity to ensure the tenant base.

Portfolio values have been written down across the board as a result of these factors.

Both capital and income returns in the property market, are expected to remain under severe pressure with returns forecast of around 5% to 8% for 2022.

Vacancies are likely to remain a major cause for concern.

A protracted period of market turmoil with a sharply increasing vacancy rate seems probable in the short term

Office vacancies at 16.5%, are at an all-time high, and the popularity of the “work from home “scenario has left many questions for this segment. The industrial segment held steady at around 4% with the retail segment at 5.8%.

The headaches of retail property owners should continue to procide challenges, according to the latest Rode’s Retail Report. The report highlights the continued decline of trading densities in malls and large centres, amid slow sales growth and oversupply. Only small locally based community centres continue to show growth. Online retail is destined to become far more significant as time progresses. For now, it is the economic weakness and its resultant impact on the consumer that is the main challenge for retailers.

A noticeable continuing trend was the higher operating costs, in particular that of municipal fixed and consumption costs, arising from high Eskom tariffs. Operating costs increased as a result in excess of 37% of gross income over all property sectors (up from the previous period, 35.7%).

This upward trend is expected to continue in 2022.


Number of properties: 16

Tenants:  34

Total GLA:  99 848m2

Total Asset Value:  R1 056 Million


Sector Analysis


Geographic Spread