Property operating costs, as a percentage of gross income, trended sharply up in 2022 which applied pressure on property owners’ bottom-lines.
As a percentage of gross income, total operating costs increased 270 basis points to 43.4% at the end of 2022. This deteriorating in the gross cost to income ratio came about as a result of total operating costs growing by 19.4% while gross income grew by 11.7%.
Gross income was driven by a higher growth in tenant recoveries as opposed to growth in contractual base rental. In 2022, base rentals increased by 8.2% while fixed recoveries and variable recoveries increased by 15% and 23.3% respectively.
For more detailed information on the SAPOA Operating Costs Report, download a free copy of the latest report here (free to SAPOA members only).
How to access SAPOA’s reports:
- Visit www.sapoa.org.za.
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- Click on ‘Reports’
- Click on ‘Free Reports’
- Click on ‘SA Property Trends Report’
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