SA’s embattled office space market plagued by escalating vacancies
With business and investor confidence hitting new lows, the local property sector has taken a desperate nosedive.
The rapid downward trajectory is shockingly visible in the moribund office space market, which is suffering from high vacancies across the country’s four economic hubs. While Cape Town has at least enjoyed a degree of buoyancy in certain areas, Johannesburg, Durban and Pretoria are in dire need of renewed investment activity as they battle against high vacancies and protracted rental pressure.
The current negative trends in commercial property can arguably be attributed to the high levels of political and economic uncertainty, with investors and business leaders preferring to hold back on long-term commitments while the country remains in a fragile position.
The 6 best commuter towns to invest in near Cape Town
You can ditch the city for the country life and still be close enough to the Cape metro. Excellent road infrastructure such as the R27 West Coast Road, N7 which now extends to Malmesbury, N1 and N2 highways mean an easy commute to and from the top six commuter towns. From Yzerfontein/Langebaan on the West Coast to Malmesbury in the Swartland, Franschhoek, Tulbagh and Somerset West in the Winelands/Boland to Suurbraak in the Swellendam Overberg region, you are spoilt for choice.
And while offering a laidback, wholesome lifestyle, you are still close to excellent schools and amenities. A fabulous seaside, vineyard or country lifestyle can be enjoyed from as little as one to two hours from the city, says Pierre Germishuys, Licensee for Seeff Winelands, Boland and West Coast.
Technological advancement and flexi-work means you can operate from just about anywhere, making buyers more mobile. Rapid urbanisation and the resulting challenges are likely to drive more buyers to move their families out of the city, or to take advantage of the wholesome lifestyle on offer just outside the city, says Germishuys.
Selling property: Spot ‘fake buyers’ with these 8 red flags
Fraud occurs in many industries across the world, and unfortunately real estate is no exception.
Besides rental scams and other illicit activities, agents and sellers occasionally fall victim to ‘fake buyers’. These scammers make cash offers on properties they know they can’t buy, and then disappear without a trace in most cases, says Gerhard van der Linde, Seeff’s MD in Pretoria East.
Van der Linde says there are probably some fake buyers who believe that the money for their transaction will somehow magically appear before they are found out, but this is wishful thinking, of course.
In many instances of ‘fake buying’, however, buyers know well from the onset that they don’t have the financial means to make a cash offer, nor will they be able to raise the funds to conclude the deal, but this does not stop them from making a cash offer.
How to maximise rental returns in a tough market
Being a landlord can be just as challenging as managing any other business and, in a slow market where stock outnumbers prospective tenants, it is especially important to have a thorough understanding of the current rental market and to take a hard, objective look at your property.
“In 2015 we saw a considerable increase in rental prices and, as the cycle goes, those prices have started coming down - along with a declining economy which has seen little growth in recent years,” says Lorraine-Marie Dellbridge, Rental Manager in the Southern Suburbs for Lew Geffen Sotheby’s International Realty.
“In these tough economic times, a landlord has to look at the bigger picture and appreciate that tenants are looking to be positioned right, with all the space that they need and the lowest possible impact on their bank accounts.”