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GROUP OVERVIEW
THE MARKET IN WHICH WE OPERATE
The JSE-listed property sector in South
Africa is a sizeable market, with some
27 companies managing assets valued at
over R350 billion, with an influx of capital
after the introduction of REIT legislation
in 2013. The local sector is now ranked
among the top 10 REIT markets globally,
with a comparable value to similar sectors in
Singapore and Hong Kong
(1)
. However, only
a limited number of REITs are sufficiently
liquid to attract foreign investment, while
the unlisted real estate market is dominated
by South African institutions.
Since 1994, population growth, urbanisation and a rapidly growing
middle class have fuelled demand for retail space, placing South Africa
in the global top 10 by shopping centres and total floor space. With
over 2 000 shopping centres, the country ranks sixth (behind the US,
Japan, China, Canada and UK), and seventh on floor space, with some
23 million square metres. While some studies suggest that South Africa
has more mall space per head (measured as m
2
/1 000 people) than its
retail sales appear to justify, vacancies – a key indicator of a property
sector’s health – remain lower than the average for other countries
through the cycle.
0
10
20
30
40
50
60
0
10
20
30
40
50
60
70
A changing market
(m)
1994
2014
Q
LSM1-4
Q
LSM5-7
Q
LSM8-10
Q
Floor space (million m
2
)
Q
Urbanisation (%)
30
3
7
14
29
12
19%
10%
Importantly, the retail sector has become an important component
in the national economy, accounting for more jobs than the mining
sector, with hundreds of thousands more jobs indirectly related to
the industry.
(2)
(1)
PwC: Real Estate: Building the future of Africa, 2015
(2)
Urban Studies Publication (June 2015) Lisa Steyn: Mail & Guardian
Clearwater Mall, Johannesburg
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Hyprop Investments Limited
Integrated Report 2015