by In2assets  |   April 17, 2020

Changes in South Africa’s Property Sector

Strengthening of Commercial Rentals Despite the political and economic upheaval that the country has been experiencing over the past year or so, commercial rentals have strengthened. In 2019, we saw many commercial renters who had originally planned to vacate their premises at the end of their lease period, decide to stay put rather than putting their liquidity at risk in the unfavorable economic climate. As a result, we saw purchases and sales decrease, but rentals increase. While businesses might delay buying property for a year or two, they will be negotiating hard for a good deal with their current landlords. With a high vacancy rate, landlords who fail to reach an agreement with their tenants are likely to lose them. As a commercial property owner, be open to negotiation if you have a good tenant that you want to keep. Unexpected Asset Availability Due to the economic and political instability of the last few years, a number of commercial properties that would not normally be available, have come to the market. For investors that are looking for unique investment opportunities, this presents some excitement. For those investors who are flexible, well-informed and have the foresight to act quickly, taking advantage of the current climate will have some long-term benefits. Changing workspace dynamics Remote work and working from home continues to gain popularity, which not only affects the residential property market, but the commercial market too. With more people out of the office, there is a definite movement towards smaller office spaces, with large ones becoming more and more difficult to rent and sell. We are also seeing an increase in co-working environments and on-demand office space, as workers priorities a balanced lifestyle and convenience over prestigious office spaces. For investors looking to take advantage of this change, adapting their commercial property options to stay relevant will be key, presenting profitable opportunities for the future. Be sure to keep up with the commercial properties on auction in your area. You never know when the perfect property could come along! Take a look at our website or chat to one of our property auction experts for more assistance.

With the recession in full swing and South Africa’s economy being at its lowest since 2009, the effects will be felt on the commercial property market this year. However, for those who know where to look, the changes brought on by the state of the economy may present opportunity. We take a look at some of these changes to capitalize on.