Migratory Trends – How business Property centers are shifting around the country.

Posted On Tuesday, 29 January 2002 02:00 Published by
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Property management strategy needs to be conversant with a number of trends in the commercial property market.
 

Property management strategy needs to be conversant with a number of trends in the commercial property market. One of these is the urban growth dynamic and the manner in which this impacts on the growth and development of nodes and centers. There are micro risks and opportunities associated with each of these areas as well as macro-economic factors that affect their growth and performance – these need to be well understood.

 

JHI Real Estate Property Management Division cites office stock figures - a proxy of the nature of the growth of centers around the country. The following table gives one a sense of the growth of office markets outside of the major CBD’s in South Africa: In this 11 year period the decentralised office markets grew by an average of 260%.

 

Total suburban stock m²

 

 

 

DURBAN

PRETORIA

CAPE TOWN

JOHANNESBURG

1990

102,000

232,000

228,250

1,362,400

1991

131,325

669,688

269,375

1,626,825

1992

140,625

773,525

302,250

1,719,625

1993

144,158

796,200

432,775

2,914,248

1994

145,838

812,713

578,625

3,077,738

1995

175,525

831,325

628,975

3,233,100

1996

190,600

890,838

651,350

3,484,250

1997

216,225

944,725

665,550

3,771,820

1998

237,610

986,800

711,000

3,926,405

1999

269,320

699,075

725,699

3,553,089

2000

315,916

743,856

767,483

4,000,088

2001

340,702

959,165

801,547

4,666,629

 

In the space of about three years, nodes such as Umhlanga grew from around 63 000m² to 180 000m². In Johannesburg, areas such as Illovo and Bryanston grew from around 24 000m² and 59 000m² in the early 1990’s to over 124 000m² and 256 000m² respectively at present.

 

According to Jay Junkoon, property management director: Africa of JHI Real Estate, the rapid supply of commercial space has implications both spatially and in terms of market equilibrium.

 

 “Property managers are required to ascertain how best to spread resources and staff, consideration being given to economies of scale and logistics. Technology naturally plays an important role in this regard”.

 

He adds Johannesburg presently faces a required take-up of over three years in order for existing available space to be filled. “With such higher vacancies in place, competition for tenants is robust; naturally rental levels and escalations are severely tested. Where financially feasible, property managers attempt to secure new and existing tenants by offering various incentives and concessions”.

Publisher: JHI Real Estate Limited
Source: JHI Real Estate Limited

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