SA Property sector values at R4.9trillion

The South African property sector is worth R4.9 trillion‚ according to a new study‚ the results of which were released on Tuesday.

The research‚ commissioned by The Property Sector Charter Council‚ was undertaken to discover the size of the country’s property sector and is the first study of its kind in South Africa.

Property Sector Charter Council CEO Portia Tau-Sekati said the research creates a hub of knowledge about the property sector‚ consolidating information and developing a common and consistent understanding.

“By determining the size of the South African property sector‚ we are moving towards a proper baseline measure to assess market size and its components‚ the scale of different services and activities within the sector and ultimately BEE transformation figures in line with the Property Sector Code scorecard‚ “ Tau-Sekati said.

Establishing the scope of the property sector is important for an accurate overview of the SA economy‚ taking into account that in 2009 the property sector contributed 8.3% of SA’s Gross Domestic Product (GDP)‚ according to a South African Property Owners Association (SAPOA) research report “The Economic Impact of the Property Sector in South Africa”.
The figures in the study provide a snapshot that reflects the status in the property sector at the base date of December 2010.
Only around 1% of land in SA is urban and residential‚ according to the research. Over 73% of land is SA is natural pasture. Around 12% of land is agricultural‚ and about the same portion comprises nature conservations and reserves.
The study shows nearly two thirds of property owned in SA‚ estimated at R3 trillion‚ is residential. Commercial property carries a value of some R780 billion. Undeveloped land zoned for development equates to R520 billion. Publicly owned property – including national‚ provincial and local government as well as state-owned enterprise – totals around R570 billion.
Currently‚ the research combines various studies that estimate the size of SA’s residential market. While the number of housing units – formal and informal – vary in the source studies‚ from 13.1 million dwellings to 8 million‚ value calculations are all estimated at similar levels of R3 trillion.
Of the R780 billion commercial property in SA‚ the research reports corporate property accounts for R600 billion‚ including investment property of R120 billion held by SA’s listed property sector. Further investment property‚ held by life and pension funds and private equity funds‚ totals R180 billion.

Retail property has the highest value of the commercial property sectors in the country at R340 billion‚ followed by office properties at R228 billion and industrial properties at R187 billion. Representing a small comparative value of R25 billion is hospitality‚ leisure and ‘other’ property.

For publicly owned property‚ the study used available information‚ which reflects R342 billion of property held by provincial government‚ R188 billion by national government‚ R37 billion by local government and R6 billion by state-owned enterprises.

The significance of this research is far reaching.

“Besides being a benchmark to monitor and evaluate the progress of transformation of the sector each year. This study marks the beginning of an ongoing research process‚ which will update information on the property sector annually. The study is a useful tool for understanding the South African property market and its dynamics. It is working progress and we hope to build a better and clearer picture of our industry. We welcome information sharing with the industry in terms of studies undertaken which could further refine our data and shine light on the mechanisms of the sectors component parts‚” said Tau-Sekati.

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