THE recent cut in interest rates, coupled with the likelihood of further decreases in the near future, should provide some relief for the business sector in general, says Peter Golding, CE of Golding Commercial Properties, a member of the Pam Golding group.
"Hopefully, this will be of particular benefit to retailers, particularly small entrepreneurs who are among those most adversely affected by the high cost of capital," says Golding.
"Many retailers have experienced reduced turnovers because of the high interest rates and consumers' reduced spending capacity. Those situated in shopping centres have been under considerable pressure financially, as in many cases their rental agreements were signed a few years ago when rentals were in the region of 10% of turnover."
Rentals have in some cases become 15%-20% of turnover, taking a bite out of income, with landlords often not ready to make concessions to tenants.
Golding says the positive scenario with predictions of more prime interest rate cuts over the next year or so should reduce these disparities, and boost earnings for businesses through increased consumer spending.
"Renewed optimism in the business sector should provide a boost for small and mediumsized businesses, which should help the property sector by way of increased take-up of retail and office space," says Golding.
Apart from growth in the business sector, entrepreneurs would be encouraged by the lower cost of capital, and this would make them consider investing in their own commercial property.
"It's also a time when opportunities exist for those considering investing in retail property," says Golding.
Playing a key role in what Golding Commercial Properties describes as its focus on creating value for property owners is Chris Immelman, who heads its broking sales division.
He has been involved in developments such as the Grand Central Shopping Centre in Cape Town's city centre, Portswood Square at the Waterfront, and Alphen Park in Constantia.
The company has recently appointed Gayle McArthur as its marketing manager.
McArthur has extensive experience in the retail sector which she gained while attached to a number of Western Cape projects such as Long Beach Mall, Steenberg Village, and the Simonsrust Shopping Centre in Stellenbosch.
Jul 23 2003 07:59:24:000AM Business Day Reporter Business Day 1st Edition
Publisher: Business Day
Source: Business Day
Interest rate cuts give hope to struggling small retailers.
Posted On Wednesday, 23 July 2003 02:00 Published by eProperty News
THE recent cut in interest rates, coupled with the likelihood of further decreases in the near future, should provide some relief for the business sector in general, says Peter Golding, CE of Golding Commercial Properties, a member of the Pam Golding group.
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