With realism back in the commercial property market, now is the time to invest
With realism back in the commercial property market, now is the time to invest, says Norman Raad, CEO of Broll Auctions and Sales. Sellers “have come to their senses” when it comes to the real value of their properties.
“We are increasingly dealing with buyers and sellers who seem more aware of the state of the economy – and that properties have been hugely overpriced for years. Unrealistic prices are just not sustainable with so many more secure investments available abroad or even locally.”
As older industrial buildings have shown an increase in vacancies, Raad says it would opportunistic to acquire such property now and also purchase long-vacant commercial offices in outlying areas.
“Prudent buyers now seek the right opportunity – not necessarily based on chasing income. An increasing number of properties are coming to the market now and corporates, after holding on to non-core operations and properties at steep monthly holding costs, are now selling such assets. Listed funds are going through consolidation of portfolios or selling off properties not finding tenants or not in line with long-term planning.”
Raad says investment yields have shifted with buyers looking for around 15% when there is any risk factor. “But despite difficult conditions, I believe investing in bricks and mortar is a better option than buying stocks right now.”
* Among the lots for Broll’s large-scaled multi-property auction in Johannesburg on Wednesday will be the Absa building in Anton Lembede Street in the Durban CBD. For further information, contact Bradley Stephens on 087 700 8269 or 082 443 7731 or email firstname.lastname@example.org.