RESIDENTIAL RENTAL MONITOR 2014 Q3 The residential sector clearly lifted its profile by catching the attention of a number of South Africas highly regarded listed property businesses. SA Corporate Real Estate for instance, recently acquired the Affordable Housing Company (AFHCO) with 27 properties worth R953 million, while Arrowhead Properties announced its acquisition of residential properties valued at just over R1 billion. And Redefine is currently in the news for stating it had reached an agreement in principle to pick up 51% of Respublica, a student housing developer, for an estimated value of R204m. Of course there are compelling reasons why residential rentals are so attractive. An increasing number of South Africans live in rented accommodation - 3,6 million households rent in total, with 2,6 million in formal dwellings. There is an urgent - and growing demand for affordable rental stock, further evidenced by estate agents reporting that prospective tenants are willing to put down deposits on future rental stock which the agent might pick up... As a result, landlords are in the enviable position of being able to pick and choose only quality tenants - and for the most part - tenants in general appear to be taking their rental payment commitments more seriously than ever. Overall, 86% of tenants were in good standing for Q3 2014. At first glance this indicates a fairly flat trend from the previous quarter. However, due to rounding, it is subtly evident that there was another very slight improvement - as for the first time on record, only 5% of tenants are found in the did not pay category - where the trend for the last 5 quarters has been 6%. Tenants in good standing are a combination of the 73% of tenants in the Paid on Time category, 4% in the Grace Period and 9% in the Paid Late category. Hence, effectively 86% of tenants are paid up in the current month. -Michelle Dickens TPN
Posted on: Wed, 17 Dec 2014 18:34:33 +0000