Presenter: Lindsay Williams Guest(s): Frank Reardon

Interest in commercial and industrial property in the Gauteng area is at an all-time high - according to South Africa's only commercial and industrial property portal. With Frank Reardon, managing director of eProp

LINDSAY WILLIAMS: Tell us about eProp?

FRANK REARDON: eProp is an online marketplace for the commercial property industry. We've been going for three years - basically we bring together supply and demand.

LINDSAY WILLIAMS: I can understand how you can buy a CD on line, but how can you get involved in property - let's face it, it's a massive investment to make over the Internet?

FRANK REARDON: We're an information marketplace, so no property transactions happen online. Having said that - we're actually looking at, and we're in the final stages of testing an online auction platform, but that's a separate platform altogether.

LINDSAY WILLIAMS: It's successful - are people taking to it?

FRANK REARDON: People are taking to it - it's incredible the amount of business that's actually happened through the website. Initially people were just looking at research - and property news - whereas now we're getting leads! We're now getting business actually happening through the website.

LINDSAY WILLIAMS: That's encouraging. What are the commercial property trends? You say of the over 100,000 searches - a whopping 57% of all provincial searches were directed at Gauteng during the first quarter of 2004. To me that's not so extraordinary - around 60% of South Africa's GDP is generated out of this area. What I'm really interested in is more what people are looking for in those 57% of searches - compared to say last year?

FRANK REARDON: You're absolutely correct - there's no question that 57% of total searches comes as absolutely no surprise. In terms of the areas that are getting the most activity - offices in Gauteng is our number one hit, retail in Gauteng is quite close behind that. Coming in at third place is for offices in the Western Cape.

LINDSAY WILLIAMS: In Gauteng offices first, then retail? That's quite interesting - speaking to some of the listed property funds on the JSE, and interviewing executives from those companies, they say they're now shifting more towards retail. You're still seeing the greatest interest in office space?

FRANK REARDON: I think that's a function of the number of businesses that actually use offices in relation to the number of businesses that require retail premises. The vast majority of businesses need office space - I think that's really why you've got such a big disparity in the number of searches for offices and searches for retail.

LINDSAY WILLIAMS: Gauteng is a big area! Five years ago Midrand, for example, may have received the most hits - is there any particular geographical node within the whole province that has particularly stood out?

FRANK REARDON: Yes, areas like Pretoria come up really highly. Then areas like Centurion, Randburg, Midrand, Sandton, Johannesburg. On the top ten suburb searches across the country Gauteng has probably got five or six of those at any one point.

LINDSAY WILLIAMS: You say that Pretoria is right there at the top of the list - is it anything to do with price, because Sandton is become too expensive?

FRANK REARDON: I don't think it's got anything to do with price, I really think this reflects the type of demand in an area. What you'll also find is that Pretoria encompasses, probably, a bigger target area for potential people going into offices whereas Johannesburg is just one of many, many suburbs in the greater Johannesburg area. If you put the Johannesburg suburbs together you'll find that they far outweigh the number of searches that we're getting in Pretoria.

LINDSAY WILLIAMS: Okay, so 57% of your hits are in Gauteng. You just mentioned the Western - is that second?

FRANK REARDON: About 25% of our total property searches are in the Western Cape, and then KwaZulu-Natal comes in at just over 10%.

LINDSAY WILLIAMS: Has that changed, again, over say one year ago?

FRANK REARDON: I would say it hasn't changed a lot - what's changing is the total number of people who are actually searching for properties, coming on to the web-site - bringing business to the people who are listing their properties.

LINDSAY WILLIAMS: Is there a scarcity? Is there more demand than supply?

FRANK REARDON: Well, it depends on the properties. There is a lot of talk amongst industrial property practitioners that there's not enough stock. In offices, in most nodes, there is an oversupply - so there certainly is no undersupply of office space.

LINDSAY WILLIAMS: I understood that there may be loads of offices around, but some of them are not quite up to the sort of standards that people are looking for? There are, maybe, some low grades available - but they want the top notch grades?

FRANK REARDON: That's definitely true. If you look at what they call the premier grade office - you're going to find a lot less of that lying around on the market than your C-grade or your B-Grade offices. You will also find the really top stuff is often developed for specific companies - it's almost to specification.

LINDSAY WILLIAMS: In the first quarter of 2005 eProp had 100,000 searches.

What about first month of the second quarter - can you give us any figures?

LINDSAY WILLIAMS: Overall, are you are seeing a very buoyant commercial property sector?

FRANK REARDON: There is no question!

LINDSAY WILLIAMS: Are prices also buoyant?

FRANK REARDON: Rentals are going to start going up. If you look at the research, at what the commentators are saying, it's looking good!