PROPERTY: JHI Renews R20bn Of Contracts
Recent Western Cape Business News
In recent months JHI, a major property services company, has renewed management contracts on property portfolios valued at a total of approximately R20 billion. These include the national portfolios of Sanlam, Capital, Vunani, Vusani and Morulat as well as a new contract signed with Fortress Income Fund – a recently listed property fund with properties spread across the retail, industrial and commercial sectors – and the contract to manage the portfolio of the Lesotho Ministry of Finance.
Currently JHI manages approximately R40 billion in property assets, which reflects an increase of 167 percent in value from R15 billion in value of properties managed in 2007.
Johann Boshoff, property management director for JHI comments: "In addition to listed property funds the management contracts recently renewed also include a number of smaller portfolios. In this regard we are receiving a growing number of enquiries from smaller landlords – generally those who find themselves faced with increasing challenges and difficulties and who do not know how to turn their portfolios around.
"In today's economic climate it's critical to place an even greater focus on the basics in property management ie retaining tenants, minimising tenant arrears through stricter controls, reducing vacancies and containing costs - including effective utilities management and energy savings. Coupled with this and given the recent volatility of the economy it's also crucial to be able to respond rapidly and if necessary implement a change in direction in catering for each client's specific needs."
Boshoff says an interesting trend in the office sector is an increasing move from so-called prime space to A- and B-grade space with tenants seeking affordability and value for money - for example those in the R160 per square metre plus category moving to office accommodation in the region of R120 per square metre and below.
"We are fortunate that the bulk of properties under our management are A- and B-grade, and as a result we enjoy a more stable market. From a vacancy perspective, and bearing in mind we are coming off a very low base, in some of our larger portfolios we are experiencing a vacancy rate of only three percent, up to a maximum of six percent in other instances. Within the retail sector we note that high traffic malls are seeing very few vacancies."
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