South African property experts remain cautiously optimistic and believe the commercial property sector is more promising than last year.
Luntz explains that the only way we are going to see real growth in the commercial property industry is with the growth of the local economy.
According to Rodney Luntz, managing director of High St Property Co, they are already seeing an uptick in enquiries in both the office and industrial sectors.
Luntz explains that the only way we are going to see real growth in the commercial property industry is with the growth of the local economy.
The office market remains a concern with a slight decrease in vacancies and this sector will remain under pressure for the rest of the year showing meaningful improvement in the second half of 2013, he says.
“This obviously is good news for tenants who remain in a strong position when it comes to renegotiating leases or relocating to new properties. “
He urges tenants to seriously consider their strategies going forward to take advantage of the current oversupply as 2012 may be their last opportunity.
Luntz says the industrial sector has withstood the downturn well over the last few years and has remained relatively stable.
“We are cautiously optimistic that the industrial market will show slight improvement this year.”
He says the retail market could spring a bit of a surprise as already retailers are reporting a substantial increase in their retail sales over the quarter.
With interest rates likely to remain low for quite some time, consumers are finding more money in their pockets which has boosted retail sales.
According to reports by the South African Property Owners Association, consumer spending is up 30 percent in the four years to September 2011.
The strength lies in the regional and super regional shopping centres as opposed to the smaller community and neighbourhood shopping centres.
Meanwhile, board of Redefine International, the diversified income focused listed property company based in London, said despite the current economic challenges it was still on track to meet its earnings forecast set out in the reverse acquisition of Wichford PLC dated July 2011.
The company made the announcement last week during its Interim Management statement from 1 September 2011 to 17 January 2012.
Mike Watters, chief executive officer of Redefine International, said that the period since the Company’s year-end in August 2011 had continued to be dominated by the Eurozone Sovereign debt and EU banking crises.
He said the highlighted uncertainty and volatile economic environment that this has created, continues to impact on the performance of the commercial property market.
Mike Watters, chief executive officer of Redefine International, said that the period since the company’s year-end in August 2011 had continued to be dominated by the Eurozone Sovereign debt and EU banking crises.
“Consumer confidence has been affected, resulting in a significant reduction in consumer spending and a knock-on effect on retailer profitability.”
He said strength of the UK Stable Income portfolio, strong performance of the Hotel, German and Swiss portfolios and solid contribution from Cromwell, the Australian listed property trust in which Redefine International owns a 24.3 percent stake, have more than offset the weaker performance of the UK Retail portfolio, illustrating the benefit of the diversified portfolio.
While being cautious, you may like to tender for a landmark building in Braamfontein in Johannesburg, said to be a rare commercial property jewel.
Jones Lang LaSalle has put out a tender for the sale of prominent Johannesburg landmark, Jorissen Place.
Located at the foot of the Nelson Mandela Bridge, the 18 storey granite structure boasts 28 000 square metres of office space, 630 square metres of retail and 563 basement parking bays.
It occupies an entire city block bounded by Jorissen, Bertha, de Beer and de Korte Streets in the regenerated area of Braamfontein and offers significant value for owner-occupier and tenants alike.
The property is within walking distance to Gautrain Park Station and other public transport systems.
It was designed by Louis Karol and in 1992, its classical modernism architecture responds to its environment making an imposing statement and providing an attractive return on investment, according to Jones Lang LaSalle.
Head of capital markets at Jones Lang LaSalle, Andrew Bradford says the main driver for owner-occupiers and investors is expense, in some instances existing buildings of good quality and functionality can trade as little as one third the cost of a new build.
“If one adds the predictable timelines and avoidance of hassle, existing buildings trump new developments by far.”
Jones Lang LaSalle has put out a tender for the sale of prominent Johannesburg landmark, Jorissen Place. Located at the foot of the Nelson Mandela Bridge, the 18 storey granite structure boasts 28 000 square metres of office space, 630 square metres of retail and 563 basement parking bays.
Bradford explains that they have achieved a number of successes in this space recently, with demand for these types of properties far outstripping supply.
“Jorissen Place is in impeccable condition with current tenants including local government and provincial tenants, a national retailer, a big four bank and an embassy.”
Through the establishment of the Braamfontein Management District, this precinct has been transformed into an appealing and safe corporate district, educational centre, and entertainment and arts hub.
He adds that potential purchasers of Jorissen Place are assured of a fair, reputable transaction and the closing date for private tenders is 29 February 2012. – Denise Mhlanga