Transcript CURRENT IMPACT of the COMMERCIAL REAL ESTATE SECTOR

Sponsored by
Dr. Douw Boshoff
University of Pretoria, Department of Construction Economics
Key findings of this study include

Non-residential real estate contributed approximately R174 billion to economic
activity, or 5.15% of all economic activity in South Africa during 2013

The contribution to gross domestic product (GDP) in 2013 by non-residential
real estate is approximately R81 billion, or 2.4% of the total GDP in South
Africa.

Non-residential real estate supports approximately 212 000 permanent jobs in
South Africa, or 1.5% of all employment in the country as at the end of 2013.

There was a total of approximately R6.5 billion in taxes generated by nonresidential real estate during 2013.
Sponsored by
Rent
Asset valuation
P = R/i
2
1
Price (R)
Construction
sector
P = f(C)
Stock (sq m)
3
Construction
(m2)
Figure 1:
Market for space
D(R, Econ.) = S
Diagrammatic FDW-model
4
Stock
adjustment
S = C/d
Emphasis of the study

Gross
Domestic
Product
–
value
added
by
each
sector

Job
creation

Taxes
on
products
and
production

Direct,
Indirect
and
Induced
Impact

Economic
impact
–
Not
physical
impact

Economic Activity – sum of activity in each sector
Emphasis of the study

Provincial
analysis

Property
type
analysis

Current
and
historical
impact

Short
term
forecasting

National non-residential real estate
Non-residential as % of total
Buildings completed as % of national
Economic Activity

Shopping
space
–
R38.5
Billion

Industrial
and
warehouse
space
R43
Billion

Other
non-residential
–
R11
Billion

Additions
and
alterations
–
R40
Billion

Office and banking space – R41.5 Billion
Gross Domestic Product

Shopping
space
–
R18
Billion

Industrial
and
warehouse
space
–
R20
Billion

Other
non-residential
–
R5.2
Billion

Additions
and
alterations
–
R18.6
Billion

Office and banking space – R19.3 Billion
Employment created

Semi&
unskilled
–
38
341

Skilled
–
98
520

Highly
skilled
–
32
449

Formal
–
169
311

Total
–
212
270

Informal – 42 960
Net Taxes generated

Shopping
space
–
R1.44
Billion

Industrial
and
warehouse
space
–
R1.6
Billion

Other
non-residential
–
R413
Million

Additions
and
alterations
–
R1.49
Billion

Office and banking space – R1.55 Billion
Economic Activity and GDP

GDP
–
R3.67
Billion
additional
contribution

Economic activity - R7.8 Billion additional activity
Additional jobs to be created

13 065 additional jobs to be created
Nett taxes to be generated

R20.8 Million in Nett taxes to be generated