There is reason to be optimistic about the future performance of commercial real estate assets in South Africa.

This is according to Malcolm Horne, chief executive officer of Broll Property Group, who is confident demand for properties to rent in the nation will pick up, thereby reducing the amount of vacant space on the market.

A yearly report published by the company predicted income from commercial properties in South Africa will rise, while capitalisation rates will become steadier.

Speaking to SA Commercial Prop News, he commented: "The South African property fundamentals remain strong, landlords and tenants have become more educated about the costs involved and the pressure is on all to find effective means to reduce operating costs."

Last month, head of capital markets at Jones Lang LaSalle South Africa Andrew Bradford asserted investors in the nation are better off purchasing existing buildings, rather than ploughing their money into new developments.

He explained expenses associated with established assets are usually considerably lower than with new builds, while there is also less hassle and more predictability over a deal’s timeline when opting for finished projects.
 

Financial institutions in Spain have been told they need to find an additional €50 billion (£41.5 billion) to cover a higher proportion of the bad real estate loans and foreclosed properties on their books.

The banks will also have to increase their provisions against Spanish real estate losses to between 35 and 80 per cent, depending on the asset class or type of loan in question, the government announced.

A deadline of the end of December 2012 has been set by the country’s politicians for the changes, however, financial organisations that choose to merge will be given additional time to raise the funds.

Speaking at a news conference about the reforms, economy minister Luis de Guindos commented: "The aim is for housing to come on to the market and for Spanish banks, by being cleaner, stronger and more transparent, to be able to extend credit, which is something that’s not happening at the moment," Bloomberg reported.

Banco Santander recently announced it had made provisions of €1.8 billion to cover its anticipated losses on its property portfolio.

Chief executive of the firm Alfredo Saenz told AFP the business had taken the measures - which significantly lowered the bank’s 2011 profits - in anticipation of legislation to this effect being announced by the government.