Global property report showcases competitive rents and strong yields in Johannesburg

Posted On Thursday, 05 December 2013 16:11 Published by
Rate this item
(0 votes)

Global tenants and owner occupiers will get a chance to rate SA's commercial and industrial property sectors against 46 world cities with the release of international brokerage firm CBRE's latest research, which includes Johannesburg property markets.

David AlcockAimed at providing clients with an immediate view on prime rents and yields in the Europe, Middle East and Africa (EMEA) region, the CBRE EMEA Rents and MarketView reported that most markets at this time are stable.

The report, which looks at cities in Europe, the Middle East and Africa included Johannesburg’s office, retail and industrial markets in the third quarter of 2013.

“A key finding is that investment markets across the region are recovering, thanks to increased capital flowing into the sector as well as improved investor sentiment,” says Broll Director of Broking, David Alcock, who contributed the SA data to the report.

With reasonable rents and attractive yields, the local market offers several key advantages to offer global tenants and owner-occupiers.

But as Alcock points out, global comparisons must be considered in light of local market differences.

“SA uses annual rental escalations, which many other markets do not,” he explains. “And here, we typically quote gross rentals whereas net rentals are typically used overseas.”

Johannesburg’s office sector is one of the most competitively priced at €164/m²/year, or some R175/m²per month.

“Johannesburg ranks in the same range as cities like Belgrade in Serbia, or Zagreb in Croatia,” says Alcock.

Office rents have shown a six percent increase quarter-on-quarter and yields stand at some eight percent.

The priciest cities for office space are Paris, France at €800/m²/year and Geneva, Switzerland at €785/m²/year.

Local retail space fetches an average €224/m²/year, significantly more competitive than the region’s most expensive shopping destinations like London’s West End at €10,140/m²/year or Paris at €11,340/m²/year.

Retail yields are holding steady at 7,25 percent.

Industrial rentals in Johannesburg are significantly more in line with other EMEA cities, coming in at €56/m²/year.

“That’s very much in line with cities like Vienna, Austria or Copenhagen, Denmark,” he adds.

Johannesburg industrial yields average at 8,50 percent.

Most Popular

Balwin's Munyaka registers record R850 million in opening weekend sales, selling 555 apartments

Mar 09, 2020
Steve_Brookes_Balwin_Properties
JSE listed Balwin Properties, a developer that cares about environmentally responsible…

Balwin Properties and ABSA launch South Africa’s first green home loan

Mar 13, 2020
Apartment 71933
JSE-listed Balwin Properties Limited (Balwin Properties or the Company) and Absa Group…

Growthpoint reports a steady first half with its growth strategies paying dividends

Mar 11, 2020
Growthpoint Properties Group CEO Norbert Sassee
Growthpoint Properties (JSE: GRT) reported distributable income growth of 2.2% to R3.2bn,…

Spear REIT launches innovative self-isolation campaign for returning travellers in Cape Town, South Africa to combat COVID-19:

Mar 18, 2020
Double Tree Op
JSE listed Spear REIT Limited, the owner of the Double Tree by Hilton Cape Town, is the…

Financial Fitness – Is this the right time to buy property?

Mar 20, 2020
Governor Lesetja Kganyago SARB1
With the South African Reserve Bank’s announcement of interest rates cut of 100 basis…

Please publish modules in offcanvas position.