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Running lean and mean

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Analysts say 2020 will be like 2019

As we enter 2020, it would be wise to keep an eye on interest rate fluctuations, foreign exchange rates, and fluctuations in the retail and industrial sectors, says Rawson Property Group’s Craig Mott.

“These trends will exercise influence on the overall economy as well as the commercial property market.”

This means commercial property such as warehousing, factories, offices, retail outlets of all genres and apartment blocks will continue to be bought, or sold, albeit at a slightly slower pace.

He believes rents will increase as loans remain tough to secure. But one should not expect much growth in the market of industrial and commercial properties.

“Another year of single-digit returns on commercial and industrial property is to be expected. Businesses may put off buying an expensive property for a year or two, and instead negotiate a better deal with their landlord or relocate to cheaper premises.”

Mott notes, though, next year might also offer some great deals for savvy, well-informed investors.

“Over the past few years, we have seen major acquisition drives focused on gentrification and redevelopment in key CBD areas.

“Many of these projects have been put on ice over the past year, but we hope to see a number of them break ground in the new year and contribute positively to the economy.”

High Street Auctions’s Joff van Reenen believes that next year will be much the same as this one.

“It’s going to take a lot of hard work for the market to recover. It’ll be at least a couple of years before we see a real change in the economy.

“My advice is to run lean and mean. As Clem Sunter would say, you need the mind and nose of a fox, but the sector will survive the slump. The market always does.”

Fundamentum’s Frank Reardon predicts “another challenging year” with the upside being some positive action and direction on state-owned enterprises and “the rampant corporate and government corruption that has crippled South Africa”.

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