Trends that dominated the property sector in the first half of 2022
Category Commercial and Industrial News
As we look back on the first half of 2022, 3Cube Property Solutions runs through some of the trends that are making their voices heard in industrial and commercial property spheres. While industrial property enjoys ongoing strength, due in part to the online shopping boom, the desire for "green" properties grows more popular with businesses seeking freedom from loadshedding and more environmentally conscious ways to do business. Demand for versatile office space with lots to offer is on the rise and the popularity of mixed-use precincts continues unabated. Lastly, the industry is becoming more efficient as a result of artificial intelligence (AI).
Industrial property remains robust
Thanks to the adaptability and relative affordability of industrial property, the sector has performed admirably during the economic crisis brought about by COVID-19. Given the sustained increase in online shopping, one of the top real estate trends in South Africa is an uptick in demand for warehousing, cold storage and logistics-related real estate. The transformation, known as the "bricks to clicks shift", has also led to a greater appeal for retail real estate that offers drive-through facilities and ways to make convenient curb-side pickups a reality. The low vacancy rates experienced in 2021 have continued through Q1 of 2022, with an ongoing recovery in the retail and manufacturing sectors.
The push for "greener" buildings continues
With loadshedding and the threat thereof remaining a constant thorn in the side of commercial and industrial enterprises alike, self-sustainability is high on the agenda. While properties with generators and inverters are in demand, buildings with access to renewable energy sources like solar power immediately grab the attention of would-be buyers or lessors. Eco-friendly assets like energy-efficient lights and solar thermal water heaters are seen not only as ways to save the environment, but also to enhance productivity. In addition, companies continue to be mindful of conscious capitalism and the need to sustain limited resources.
Office space that offers more
Given the current oversupply of office space, landlords are likely to continue to adopt creative approaches to filling vacancies. Commercial real estate will therefore increasingly be characterised by perks and incentives like well-equipped gyms for tenants and their staff to use, on-site baristas and rooftop bars. Office space is still seen as a necessity, with most companies opting for hybrid working solutions in which staff members work from home on certain days, but are expected to be at the office on other days. The reasons for this range from team cohesiveness to collective innovation.
Mixed-use developments are on the rise
Consumers are responding favourably to the idea of "live, work and play" precincts in which retail, residential and commercial spaces coexist side by side. Such developments typically offer residential apartments as well as office blocks, retail space, a wealth of entertainment options and easy access to public transport and arterial routes. The state-of-the-art security and superior way of life offered by these mixed-use nodes will continue to grow in popularity for the foreseeable future. Mixed-use developments are proving to have widespread interest among all property investors, including first-time buyers, seasoned professionals and corporates.
Increased reliance on artificial intelligence (AI)
From a property practitioner's perspective, AI will continue to allow more to be achieved in a day's work. Increasingly, practitioners can access data such as property history and values at the click of a button. In addition, AI algorithms also make it possible to predict future rental costs and predict market anomalies. The predictions made possible by AI will continue to help investors make smarter and faster decisions.
Despite all the turmoil of recent years, commercial and industrial property remains one of the most reliable forms of investment, with capital growth to be enjoyed over time. For more information or to find your next investment, contact 3Cube Property Solutions today.
Author: 3Cube Property Solutions
