Business / Companies
Pearl Properties expects to grow its rental income
23 Mar 2012 at 13:18hrs | Views
The property market has been characterised by limited demand for CBD offices and suburban retail space, despite this Pearl Properties expects to grow its rental income and occupancy levels through improving the quality of its lettable space.
From one of its suburban retail properties, the group expects the rental yield level to rise from a pre-refurbishment yield of 4.26% to a post-refurbishment yield of 11.35%. New property developments are also expected to attract higher quality tenants and thus improve on rental income and yields.
Office parks remain resilient in terms of rental growth and higher occupancy levels, however there is limited upside for continued rental growth. Consequently the group is targeting to grow its lettable area and hold land bank worth 10% of the total portfolio. During the year they purchased 52,611m2 of prime residential land.
The group's entry into the residential sector is expected to yield a high target return of 25%. We are excited about the group's prospective property developments in the lucrative sector. The country has a massive housing backlog, estimated at 1.2m units, which in the short to medium term should support the high rentals. Upward movement on prices for residential properties could however be constrained by limited liquidity and the lack of mortgage finance.
An improvement in industrial rentals performance. Industrial properties have been attracting negligible rental and yield levels, due to the continued depressed performance of the manufacturing sector. However, a new trend of increasing demand for retail warehousing space has brought the sector to life.
From one of its suburban retail properties, the group expects the rental yield level to rise from a pre-refurbishment yield of 4.26% to a post-refurbishment yield of 11.35%. New property developments are also expected to attract higher quality tenants and thus improve on rental income and yields.
The group's entry into the residential sector is expected to yield a high target return of 25%. We are excited about the group's prospective property developments in the lucrative sector. The country has a massive housing backlog, estimated at 1.2m units, which in the short to medium term should support the high rentals. Upward movement on prices for residential properties could however be constrained by limited liquidity and the lack of mortgage finance.
An improvement in industrial rentals performance. Industrial properties have been attracting negligible rental and yield levels, due to the continued depressed performance of the manufacturing sector. However, a new trend of increasing demand for retail warehousing space has brought the sector to life.
Source - Byo24News
