The cumulative fuel price increase has added significantly to overall consumer price inflation, and a further increase in June will sustain this pressure, says John Loos, property sector strategist at FNB Commercial Property Finance.
While the Department of Energy has not announced the official petrol price for June 2022, data from the Central Energy Fund and the end of government interventions indicate the cost of petrol could increase by more than R4/litre. This would push the country’s petrol price above R25/litre in June for both grades.
“We believe that this impact could be felt more on larger super-regional and regional shopping centres, which are more significantly focused on such purchases, including entertainment, eating out and clothing and footwear retail. “We believe that ongoing fuel price increases are a negative for an already-battling office property market. The office market is challenged by a lot of underutilised space due to a far higher working from home level compared to prior Covid-19 lockdowns.”
“This can be an additional source of encouragement to certain employers to reduce their office space needs, if the success of the lockdown work from home ‘experiment’ wasn’t enough encouragement already. So it’s an additional potential source of pressure on the office market.”
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