Business Partners‚ a risk finance company for formal small and medium enterprises‚ said on Wednesday (24 April) it had allocated R500m of its annual investment budget to commercial property investments‚ which would lower the risk of the company's investment portfolio.
Van Biljon said investing in commercial property as a long-term investment strategy offered attractive risk-adjusted returns in comparison with other investments.
"We believe that commercial and industrial property remains an attractive investment for entrepreneurs‚ either as a sound long-term one or to secure tenure for their own business operations," Van Biljon said.
Marius Muller‚ chief executive of retail investment property company Pareto‚ said at a Business Partners seminar that government spending provided an opportunity for the property sector.
Government spending would "assist the property sector in terms of filling vacancies‚ stimulating new development and activity"‚ Muller said.
"We are starting to see‚ on the industrial side‚ that there's significant movement already," he added.
"Demand for prime logistics space in metropolitan centres was likely to remain strong and locations close to markets would become increasingly attractive as transport costs rise‚" Muller said.
He says there is an increasing demand for industrial property‚ while support services would potentially increase demand for office space.
"Infrastructure and services investments in rural areas would also unlock smaller markets," he predicted.
Muller said a concern in the listed property sector was the high number of transactions at lower values indicating that smaller properties were now being sold.
"This is a concern in terms of the kind of listings we're seeing and the quality of those listings," he said.
While the smaller‚ newly listed funds were looking to gain critical mass‚ transactions in the market were often limited to smaller‚ lower quality portfolios as the large properties were not being traded.
"We expect some consolidation happen between smaller funds to get them up to a chunky size where they can be attractive to fund managers and investors," he said.
Muller said the new real estate investment trust (Reit) structure was a challenge to unlisted property groups as the current existing legislation only applied to the listed property sector.
"Private property entities, which currently operate using a property loan stock structure, would face a challenge in terms of receiving the same tax treatment as listed groups," he added.
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