Improved vehicle sales a boon for industrial property vacancies

26-10-2010

Great news for the Port Elizabeth industrial property market has been the resurgence, from the ashes, of new-vehicle sales.

According to Erwin Rode, property valuer and economist of Rode & Associates, the improvement in the growth of new-vehicle sales bodes well for industrial property vacancies and, consequently, for market rentals in Port Elizabeth. This relationship between the health of the motor-vehicle industry and the Port Elizabeth industrial property market is shown in the accompanying graph. Evident from it is the strong correlation between the under-utilization of production capacity in the motor-vehicle industry ― one of the pillars of the Port Elizabeth economy ― and industrial property vacancies.

Rode adds, “The current phenomenal growth in new-vehicle sales is most likely still distorted by base effects. Should this wear off, growth in new-vehicle sales should moderate again to reflect the still dire state of many a household coffer.”