OM's 2001 leasing performance

Posted On Tuesday, 21 August 2001 03:01 Published by
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LEASES with a value of more than R525 million and covering 395 000m2 - the equivalent of 20 city office towers - have been concluded by Old Mutual Properties' commercial

LEASES with a value of more than R525 million and covering 395 000m2 - the equivalent of 20 city office towers - have been concluded by Old Mutual Properties' commercial and industrial leasing team in the nine months to September.

'This is almost as much as we let in the whole of 2000 and is despite a tough market ,' says Ian Watt, managing director of Old Mutual Properties. The deals exclude leases on major retail projects such as Gateway Theatre of Shopping, the R1,4 bn, 120 000m2 retail and leisure complex opened last month at Umhlanga, and the expansion of Menlyn Park, Pretoria.

Deals in central business districts included 60 in Johannesburg, 40 in Durban, despite increased competition from the Umhlanga node, and a further 40 in Pretoria.

'A significant A-grade office deal in Cape Town was struck at R55/m2, showing rental levels for prime space in the city are holding up in the face of the appeal of decentralised nodes.'

The largest office deal was a 12 000m2 letting to the Pretoria Society of Advocates which will occupy the entire former Mutual & Federal building in Vermeulen Street from the beginning of March 2002, with Mutual & Federal relocating into 5 200m2 at 536 Schoeman Street in Arcadia.

Alf Bender, Old Mutual Properties' broker manager, says that demand for offices in the inner city of Pretoria is picking up.

'This is due to the fact that government departments have been barred from any further relocation out of the city, as well as the establishment of a city improvement district (CID) in the city. We are achieving rentals up to R38/m2 in the inner city and a substantial portion of our new leases are with emerging businesses,' he says.

Other significant Pretoria office deals were with the National Youth Commission, for 1 070m2 over five years; ICASA, for 670m2 over five years ; Fintech Information, for 960m2; and the Centurion Academy for 850m2.

The 60 deals in Johannesburg CBD included a five-year retail lease with African Bank for 273m2 at R110/m2 , a new rental high for the inner city, and with the Gauteng Provincial Government, for an additional 1 122m2 at Glencairn Building

Old Mutual Properties has witnessed a marked improvement in Johannesburg inner city leases since the beginning of the year, with many emerging business opting for CBD locations, says regional portfolio manager, Kendal Probert.

'We hit the bottom of the market in 1999/2000 when we were leasing an average of 300m2 a month. We are now doing a monthly minimum of 1 500m2, a figure which is sometimes as high as 2 500m2,' she says.

The largest Durban CBD deal , worth more than R12 million, was a 1 040m2 letting to the US Government.

The bulk of the industrial deals were concluded in and around Johannesburg, the largest being a lease to Imperial Logistics for a 25 000m2 warehouse in Alrode.

Others were with Bidfreight Logistics which signed a lease for 11 300m2 at City Deep Industrial Park and for a 7 900m2 warehouse over six years at Khulani Industrial Park in Jet Park ; security group, Securico, which took a seven year lease for 5 011m2 at 5 Thora Crescent, Wynberg; and Mondipak, for a 10 900m2 warehouse over five years in Springs. In Pretoria, Statistics SA signed a lease for a 6 300m2 warehouse at Hermanstad Industrial Park.

Gauteng leasing manager Stef Boscia says that there is still a severe shortage of A-grade industrial property in Gauteng, and, as a result, there is good demand for B and C grade properties. A grade properties are fetching up to R20/m2 with B and C grade warehousing going for up to R14/m2 and R9/m2 respectively.

Biggest industrial deals in Durban were at New Germany, with two lettings of 3 900m2 and 2 300m2, and in Cape Town, 7 500m2 was let at Epping Industrial Park.

Publisher: Cape Business News
Source: Cape Business News

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