In the  world of South African retail property development, new construction has slowed down and there’s the perception of oversupply, but some of Gauteng’s biggest malls are getting bigger, SA Commercial Property News reported.

There’s appetite for regional and super-regional malls, which enjoyed low vacancy rates in 2016 — 3 percent and 2 percent respectively — painting a positive picture of the economy.

Johannesburg’s office market is a different story with slow growth in rental rates. Vacancies increased from 11.3 percent in the third quarter of 2015 to 11.8 percent in Q3 2016.

The industrial property market is dominated by transport and logistics service providers.

“South African commercial property continues to present attractive investment opportunities to discerning investors, despite challenging economic conditions,” said said Robert Shaff of Nexus Property Group, in a Biz Community interview. “Evidence of this lies in the strong performance of the South African listed property industry, having risen nearly 9 percent over the first nine months of this year – close to double what equities have achieved.”

Jeffrey Wapnick is managing director of Octodec, a real estate investment trust (REIT) that claims to be one of the largest owners of property in the Tshwane and Johannesburg central business disctricts.

“There is a positive momentum in the CBDs with demand for quality residential and retail space expected to remain solid even in challenging economic conditions,” Wapnick said, according to SACommercialPropNews. “South Africa is facing economic challenges but we are seeing significant private and public investment projects accelerating in the Tshwane and Johannesburg CBDs. This is highlighted by the increasing demand from national retailers recognising our CBD nodes as prime locations for stores roll-out.”

For the year ending in September 2016, South African REITs provided a solid performance for investors, EProp reported. They delivered total returns of 12.3 percent compared with South African shares at 4.8 percent, South African bonds at 15 percent and cash at 5.4 percent.