This is according to Monica Pienaar, manager for JHI property services company in Namibia, operating from offices in Windhoek.
The company also operates in Oshakati, Ondangwa, Oshikango, Rundu, Katima Mulilo and Swakopmund and manages a number of high-profile properties for private companies and pension funds. Over the past year (2009) the company has concluded transactions for the lease of some 26 000sqm in office and retail space.
Says Pienaar: "Namibia is fortunate in that the adverse economic conditions have not had a major impact on our country's main sources of income, namely mining, tourism and agriculture. While the annual inflation rate of seven percent in December 2009 was reduced compared to 10.9 percent in December 2008, it is estimated that during 2009 Namibia experienced minus 1.9 percent growth.
"However, while the hospitality industry reported approximately a 15 percent decrease in the number of visiting tourists during 2009, this was not the sharp decline that was anticipated due to the global economic crisis. The housing sector has held up well with annual growth in house prices of 23 percent since October 2008. What is of concern is increased unemployment and the likelihood of price hikes in regard to the cost of electricity.
"Over the past year we have seen a good take-up of vacant commercial space – with retail space in particular remaining in demand. During this period we've also seen a steady rental escalation averaging at approximately eight percent for both office and retail space," she says. Currently office accommodation in major centres such as Windhoek ranges from approximately N$85-130 per square metre, depending on the grading of the space.
Pienaar says a trend which has become evident in Windhoek is the rezoning and conversion of houses on the periphery of the CBD to smaller office buildings. This is due to the fact that parking in the city centre is limited, and also as businesses prefer, wherever possible, to own their own property rather than lease space.
JHI reports a consistent demand for office accommodation in Windhoek, with space recently leased to the International College for distance learning (Intec – which includes Damelin and the Career Development College), the Government of Namibia, Namlife (part of Sanlam), and South African Airways.
Currently the Namibian government is upgrading a number of existing buildings or demolishing old buildings to construct new multi-storey buildings – a factor which is favourably impacting on the aesthetics of the city. However this may create an increased supply of vacant space as they relocate to their own buildings.
Commenting on the retail sector Pienaar says: "In the northern town of Oshikango, there is an increasingly high demand for retail rental space as a result of cross border trade, with a constant stream of day shoppers coming into the town from Angola. There is also a significant demand for retail space in the town, which is resulting in new developments - with a new centre recently launched as a consequence."
She says a further positive indicator for the retail sector is the fact that several major national South African retailers are increasing their footprint in Namibia. The Oshakati Game shopping centre, which is managed by JHI, is currently being extended with some 1700sqm in retail space added and already taken up by various retail outlets, including Edgars, while Mr Price has relocated to larger premises in the centre, with their vacant space taken up by Truworths - thereby increasing the size of its current store. Pick n Pay is planning an upgrade of its store and JHI reports further enquiries and demand for vacant space in this sought after centre.
In addition, the extension of the Oshikango Ellerines centre, which is also managed by JHI, is already under way with the new area to accommodate Pep Stores – who are set to relocate to more spacious premises of approximately 1000sqm – and also to accommodate Spar. In relocating their current shop to the new area in the centre, Pep Stores' current shop space will be taken up by other lines in the Pepkor group, which are already represented in the centre but wish to expand.
Pienaar says currently rental rates for retail space varies between N$120-250 per square metre in Windhoek and from approximately N$100 to N$180 per square metre in the north, depending on the size and location of the shops.
