PROPERTY: Time For Attractive Rental Deals
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VACANCIES continue to creep upwards in the local industrial property market, according to Andy Beddow, a director of Baker Street Properties.
A biannual analysis that the company has just completed of the vacancies across all industrial nodes shows that there is a slight up-tick of vacant space to over 463 000 sq m in the greater Cape Town area. This equates to an increase of 4% from May this year, Baker’s last analysis.
“Most notable increase was the vacancies in the mini-unit sector for units under 500 sq m, where vacancies increased by 17% from May this year,” Beddow adds.
“This indicates that smaller businesses are struggling in this economy and that a significant number of these have closed their doors, or have reached a point where they need to find sub-tenants to take over their rental obligations.”
“Another striking vacancy increase was noted in Montague Gardens, where vacancies have increased by 39% since May this year, to an overall total of 68 575 sq m. This increase was predominantly in the larger industrial properties over the 1 000 sq m mark.”
Beddow says that rentals have continued to remain static in the last 12 months and are not expected to increase during the remainder of the year. Average gross rentals across the board remain at R30/sq m, however the market is seeing deals being done now at R28/sq m (excl. VAT) in popular industrial nodes, where previously R30/sq m was the minimum.
Power availability still remains an issue and tenants looking for large power supplies have a very limited choice in terms of property alternatives.
“Industrial land sales are also scarce and it is difficult to place an average rate on land, due to lack of volume of sales. However, there is definitely pressure on land prices and we have seen offers accepted at rates half of the asking prices from the peak in 2008. Even with lower interest rates, access to development finance is limited.”
“In a reversal of the past few years, there are now several large good quality warehousing units available on the market. These units previously did not remain vacant for long, but are now lingering in the market “says Beddow.
“If your lease is expiring in the next six months make sure to contact us. We have some keen landlords ready to negotiate very attractive rentals,“ Beddow says.
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