Commercial property market will be stagnant and effectively reverse in early 2013

Anyone expecting 2013 to usher in even a modicum of fireworks in the commercial property market is going to be sorely disappointed as it is very likely that landlords are going to have to accept minimal rental increases and, in many cases, rentals might well remain pegged at 2012 prices.

This is according to Org Geldenhuys, managing director of Pretoria-based property development and marketing company, Abacus DIVISIONS.

"The year has started off very slowly - far slower than most years we have experienced. Sure, the year has just started - but normally we have interest from the marketplace by this stage already.

"Moreover, we believe we are not going to see an increase in rates in the areas we work in. It looks like landlords - and property portfolios - are going to have to be satisfied with 2012 rates in many instances. How property owners interface with their tenants is going to have an impact on just how well they do in a market that continues to remain soft. One of the big trends that might possibly emerge in 2013 is the dropping of deposits.

Major property group, Growth Point, is the pioneer in this regard and late last year issued a press statement saying that they will not be asking new tenants to pay deposits. This will bring a major reprieve for tenants - and might galvanize more activity in the marketplace. But, in real terms, it does not translate into more money in the pockets of landlords. On the bright side, however, it could well lead to a decrease in vacancy levels, which may be the precursor for growth in the commercial property sector. But this will - at the soonest - only start emerging during the second quarter of 2014," said Geldenhuys.

He added that landlords will need to "find ways" to secure current tenants and to lure new ones. "This year will probably see a focus on holding onto current tenants and, hopefully, trying to attract new ones by offering some 'out of the box' marketing ideas."

Commenting further, Geldenhuys said that over and above doing away with deposits, some landlords are trying to lure tenants with increased tenant allowances and rent free periods. "We are also witnessing landlords providing incentives to brokers and agents of up to 200% of usual commission to expose vacant buildings to the brokers' client base - all in the hope of signing up tenants."


  Comment on this Article

  Please login to post comments

Post to my facebook wall
Characters remaining

    Latest Property News
    • 19 Jan 2018
      Extending from Randfontein in the west to Roodepoort in the east and including the towns of Krugersdorp and Magaliesburg, the West Rand has a plethora of property available to residents who choose to make this unique area their home.
    • 19 Jan 2018
      When it comes to financial planning, doing the work to ensure you’re prepared for unexpected emergencies is just as important as ticking off your other goals and New Year’s resolutions. The beginning of the year is also the perfect time to review your various insurance policies.
    • 19 Jan 2018
      No surprises at the first Monetary Policy Committee of 2018, as Reserve Bank Governor, Lesetja Kganyago, announced that the interest rates would stay at their current levels.
    • 18 Jan 2018
      The Southern Suburbs make up some of the most popular residential areas in Cape Town, comprising charming groups of suburbs which lie to the south-east of the slopes of Table Mountain. It is seen as the city's most expensive residential neighbourhoods with a choice of various private schools, upmarket eateries, wine estates, beautiful homes and trendy apartments.
    • 18 Jan 2018
      New year, new goals! If you’ve resolved to purchase your first property in 2018, then this 6-step guide from the Rawson Property Group is a must-read. It will help you navigate and simplify what is often be seen as a confusing process of buying your first home – right from the house-hunt to the house-warming.
    • 17 Jan 2018
      While the current property market may still favour buyers, it doesn’t mean that they shouldn’t be well prepared before putting in an offer to purchase.
    • 17 Jan 2018
      Lightstone lists Blair Atholl as the most expensive suburb with an average house price of R11.2 million, followed by Westcliff (R10.5 million), Dunkeld (R9.3 million), Sandhurst (R9.1 million) and Inanda (R7.2 million).
    • 17 Jan 2018
      As it currently stands, there are four main ways in which a home can be bought in South Africa, says Adrian Goslett, Regional Director and CEO of RE/MAX of Southern Africa, who adds that deciding in which legal entity to purchase the property is not a decision that should be entered into lightly, as each has its pros and cons.
    Subscribe to the MyProperty Newsletter

    Last Name  
    Email Address  
    Email Frequency
    Share this Page

    For Sale Property
    Rental Property
    More Options
    Connect with us