South African Business 2021
Welcome to the ninth edition of the South African Business journal. First published in 2011, the publication has established itself as the premier business and investment guide to South Africa. This issue has a focus on economic recovery plans which have been put in place to tackle the challenges thrown up by the global Covid-19 pandemic. National government’s focus on infrastructure and the use of Special Economic Zones is highlighted, together with a feature on the nascent maritime economy. Regular pages cover all the main economic sectors of the South African economy and give a snapshot of each of the country’s provincial economies. South African Business is complemented by nine regional publications covering the business and investment environment in each of South Africa’s provinces. The e-book editions can be viewed online at www.globalafricanetwork.com.
Welcome to the ninth edition of the South African Business journal. First published in 2011, the publication has established itself as the premier business and investment guide to South Africa.
This issue has a focus on economic recovery plans which have been put in place to tackle the challenges thrown up by the global Covid-19 pandemic. National government’s focus on infrastructure and the use of Special Economic Zones is highlighted, together with a feature on the nascent maritime economy. Regular pages cover all the main economic sectors of the South African economy and give a snapshot of each of the country’s provincial economies.
South African Business is complemented by nine regional publications covering the business and investment environment in each of South Africa’s provinces. The e-book editions can be viewed online at www.globalafricanetwork.com.
Create successful ePaper yourself
Turn your PDF publications into a flip-book with our unique Google optimized e-Paper software.
OVERVIEW<br />
Construction and property<br />
Logistics property is strongly placed for growth.<br />
SECTOR INSIGHT<br />
Cement and brick<br />
manufacturers are hoping for<br />
a quick recovery.<br />
Credit: Equites<br />
The trend which saw logistics property growing as a<br />
sector because of the Amazons of the world needing<br />
more space to store their products will speed up in<br />
the post-Covid world as more people work and order<br />
from home.<br />
The Economist focused in its 30 May 2020 issue on<br />
Prologis, Amazon’s biggest landlord. The American company<br />
has assets of $125-billion and 90km² of floor space, and spent<br />
$25-billion in 2019 in America and Europe. E-commerce now<br />
accounts for about 40% of its construction activity, whereas<br />
it was a fifth before the pandemic.<br />
A similar trend playing out in <strong>South</strong> Africa was noted by<br />
Nick Wilson in the <strong>Business</strong> Times (Sunday Times 5 July 2020).<br />
The logistics property sector had “boomed in recent years due<br />
to the growth of e-commerce” but was likely to do even better<br />
because of Covid-19. About a third of Fortress’s R30-billion<br />
portfolio is in the logistics sector and it signed contracts in<br />
2020 with Takealot and a Netflix production company.<br />
The clients of Equites, a company which focusses on<br />
logistics property, include Amazon, Super Group, HDL and<br />
DSV, a Danish transport and logistics company. Equites is the<br />
only specialist logistics property company listed on the JSE. In<br />
six years, its portfolio has grown from R1-billion to R15-billion.<br />
There are more than 30 real estate investment trusts (REITs)<br />
on the JSE and they generally deliver good value.<br />
FNB, which publishes a regular property barometer,<br />
has done an in-depth analysis of previous crises to help<br />
understand what may occur in the post-Covid property<br />
market. According to John Loos, a property strategist at FNB<br />
Commercial Property Finance, the most vulnerable sector is<br />
likely to be Retail Property. Smaller neighbourhood centres,<br />
with more essential items<br />
and greater convenience,<br />
will be less vulnerable.<br />
This is borne out by<br />
the results announced by<br />
Resilient in 2020. Of the<br />
company’s 28 retail centres<br />
across <strong>South</strong> Africa, the<br />
ones that did best were the<br />
smaller, rural malls.<br />
The <strong>South</strong> <strong>African</strong> Council<br />
of Shopping Centres calculates<br />
that the country has the sixthhighest<br />
number of shopping<br />
malls in the world. R2-billion<br />
was recently spent on Menlyn<br />
Park in Pretoria to expand it to<br />
177 000m² of gross lettable<br />
space while the Gateway<br />
Theatre of Shopping in<br />
Durban, <strong>South</strong> Africa’s secondbiggest<br />
mall, recently spent<br />
R750-million.<br />
The lockdown accelerated<br />
the trend for people to work<br />
from home, and so the<br />
Office Property sector will<br />
come under pressure. Many<br />
companies will be reducing<br />
office space but, as Loos<br />
writes, “Improved technology<br />
has gradually been driving a<br />
greater remote working trend<br />
for some years. Covid-19 has<br />
merely sped this trend up.”<br />
SOUTH AFRICAN BUSINESS <strong>2021</strong><br />
72
Change language