2014 turned out to be an eventful year for the commercial property sector. The first quarter saw the completion of the much-anticipated Portside tower block in the Cape Foreshore representing the newest in integrated and sustainable building design. Accelerating the transition to environmentally friendly architecture in corporate business and commercial property, the Green Building Council of South Africa, along with property developers, oversaw the award of dozens of Green Star certifications in recognition of sustainability contributions throughout the year from the commercial space industry. This trend is forecast to continue into 2015 via two conduits – the growing number of businesses opting to take advantage of the benefits of ‘green’ premises; and legislation aimed at carbon emissions reduction, scheduled to take effect in the autumn.
A number of macroeconomic variables are expected to have a tangible impact on commercial property in the New Year. As of mid-2014, national economic growth is projected to remain low for the next few quarters, which means property demand is unlikely to increase significantly for the foreseeable future. Related factors restricting the performance of the commercial property market are,
- rising electricity costs (in tandem with ongoing national power supply problems)
- a broader high-inflation environment (as determined by the Consumer Price Index)
- dampened interest in listed property investment, due partly to the increased risk of South African sovereign and commercial debt financing.
