Construction & Real Estate

Although South Africa’s construction industry remains a major economic engine, the industry has struggled to maintain pre-2010 highs, when work related to the 2010 FIFA World Cup propelled sector growth into the double digits. The interim has been marked by project delays, labour unrest and a subdued macroeconomic environment, which saw employment figures, profits and new projects decline in 2014 and 2015. Despite these challenges, the industry’s long-term forecast remains positive, with major new investment expected in the coming years under the government’s National Infrastructure Plan and contractors benefitting from steady expansion in the residential real estate sector. Although far from the conditions of the early 2000s, South Africa’s property market has remained resilient in spite of challenging macroeconomic conditions. Rising demand for affordable housing and a host of “new city” projects have kept the residential market steady, while A-grade commercial space – albeit on the verge of oversupply in some areas – is poised for strong growth. Although rising electricity prices are having an impact on the real estate market, the country’s burgeoning e-commerce, transport and logistics segments are expected to improve vacancy and rental rates across all property segments.

This chapter contains an interview with Eric Vemer, CEO, Group Five.