Commercial property posts strong returns
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SA's commercial real estate market returned to double-digit performance in 2010, with a total return of 13.3%, compared with the revised 8.8% (8.7%) return in the previous comparable period.
According to the latest South African Property Association/Investment Property Databank property index, the headline total return was still dominated by the income component, which was 8.9%, while capital growth was 4.1%.
After 18 months of little-to-no capital growth, confidence and fundamentals began their recovery in the second half of 2010, during with period the bulk of the year's capital growth was delivered. Stronger retail sales growth and signs of a return to discretionary spending helped to drive capital growth in the retail sector to 4.4% - the highest of any sector.
Office and industrial capital growth - at 3.9% and 3.2% respectively - were slightly more subdued, in part due to concerns over fundamentals in the secondary markets, the data showed.
