Well-positioned properties are in high demand as landlords tend to make rentals more appealing with renovations and installations
Whatever the current trading conditions, strategically positioned office, retail and industrial properties generally tend to receive a favourable response on auction, says MC du Toit, chief executive auctions and sales for BidX1 South Africa, which will bring its first multiple auction to the market on April 10.
“Currently we are seeing a notable increase in investors seeking mixed-use properties, a demand trend which has been in evidence for some time, and of late there has also been a recovery in industrial sales,” he says. “Well-positioned industrial developments, development land and smaller mini-factories have been selling very well, and warehousing has also been in demand over the past year.
“And despite the recent fuel increases, there is still some buoyancy in the logistics market in key hubs because there will always be a need for goods to be transferred.”
Du Toit says in the office sector AAA-grade leases will always remain sought-after among corporates as the prime location of the property drives high demand. Vacancies may be found in certain B and C grade buildings, a trend exacerbated by alternatives such as shared work space, or staff working from home. “However, landlords are making every effort to make rentals more appealing, with renovations and attractive tenant installations.
“While some major corporates have been disposing of some of their properties, there are various strategies around this, with restructuring, refocusing or repositioned location being factors that contribute to such decisions.
“For many businesses it still makes sense to own the premises from which they operate, while for others renting is a better option. What we can see is that while some businesses may be consolidating or even downsizing, there are still investments being made, and often it’s more a case of merely moving the assets rather than downsizing, while still retaining these within the organisation.”
Du Toit says although the retail market is constrained due to downward pressure on consumer spend, established malls still seem to draw tenants, and Sandton City has been fully let for the first time in years. Retailers who are performing well are mainly those dealing in low-cost goods and, at the other end of the scale, in high-value luxury items, with the retailers catering for the middle-income group experiencing challenges.
He says it’s true to say that auctions are merely a method of sale, and that all properties are suitable for auction, whether residential, commercial, retail or industrial, as they bring together all serious and interested buyers in a concerted focus at one time to compete against one another. However, it is important to determine what method of sale will ultimately produce the best result at that specific time for that specific property.
“In this regard, as we do distressed auctions as well as private instructions, we believe we are well placed to achieve fair market-related offers for sellers.”
To contact BidX1SA see https://bidx1.com/en/countries/south-africa or email MC du Toit on firstname.lastname@example.org.