Commercial office space remains the most challenging sector for the auction property market at present, says Norman Raad, chief executive of Broll Auctions and Sales, which will stage its next major multi-property live and online auction in Joburg on October 29.
The challenges especially apply to smaller country towns where there has been complete disinvestment in commercial property because of major corporations’ strategies of consolidating or downscaling.
“However, on the positive side, small-scale retail property is starting to look cheaper than it has for quite a while.
“The yields have moved up and realistic sellers are much more receptive to doing deals than before. The most resilient retail property is in areas where there are captive markets, as well as fuel stations which - with their small retail shops - are in strong demand with sellers achieving good prices.
“It is good to see young and brave entrepreneurs entering the property investment market and seizing the opportunity in this buyers’ market.
“Smaller industrial properties are attractive purchases for new investors, as the properties are easy to maintain and, acquired at the right price now, can unlock value in the future providing the owners have resilient tenants.
“There are inevitably diverse opinions on South Africa’s political and economic stability and the country’s future, but at least property prices are now starting to look attractive and interesting for the investor. There is always going to be uncertainty about South Africa’s future but when yields start approaching 14% and 15%, buyers will start finding their way back to the property market.”
Raad says residential blocks remain robust providing there is sound management taking care of the property and ensuring rent is collected timeously.
“Of all the properties taken to auction by Broll over the past six months, residential properties remain one of the most sought after.”
For more information about Broll’s October 29 auction, call 087 700 8289, email [email protected] or visit www.brollauctions.com.