Related
Shopping malls or entertainment destinations?
Marc Edelberg 17 Oct 2023
Divergent trends in property values across Africa
Roger Long 22 Oct 2021
A rigid approach could be a death knell in the current property market
Gary Palmer 17 May 2021
Commercial property still tough market for 2010
"Now that we have completed the first quarter of 2010, on reflecting on the same period in 2009 it is evident that at this time last year prospects were extremely bleak whereas currently there is life in the commercial property marketplace, albeit in a weak and still recovering economy,” says Marna van der Walt, CEO of JHI property services company.
She was commenting on the fact that while the first two months of 2010 have seen an upturn in the number of commercial property enquiries received, tenants remain in cost control mode and tend to be reluctant to commit to major changes.
“The reality is that the commercial property industry will have to contend with a tough market for the remainder of 2010 and even through to the start of 2011," she adds.
"Under the current constrained economic trading conditions, there is a drive among tenants towards value-offering commercial space. Key imperatives for property owners/landlords are ensuring that rentals are collected promptly and that vacant space is kept under control.
“There are opportunities for specific buildings to be turned around and, with focused plans, value can be unlocked. We are pleased to report that with concerted and targeted marketing efforts the company is achieving some successes regarding the movement of commercial space. We have exceeded the property income return as reported in the SAPOA/IPD Property Index for 2009. We are currently busy working on a number of sound business prospects and with a stable and committed workforce are positioning ourselves to capitalise on the upturn."
She says in terms of access to finance, greater flexibility and a better understanding of the risk in this market is being shown by the banks. Banks are requiring a greater equity portion and lower loan to value ration and coupled with this, loans are more costly in terms of interest payable.
"Looking at the retail sector and in regard to shopping centres managed by the group, in February 2010 we have noted that the best performing segment of this market has been pharmaceuticals, cosmetics and toiletries. Food and beverages are now out of negative growth and with textiles, clothing and footwear, are starting to show positive growth. On a more sobering note however, the surge in electricity and fuel costs in April are not helping consumers get out of the woods in terms of unavoidable, increased monthly expenses.
"Our view remains that the Soccer World Cup is a tremendous showcase for South Africa, including our infrastructure and ability to organise such an event. The spin-offs for us are to attract investors in the medium term, after successfully hosting this major event," concludes Van der Walt.
