Global tenants and owner occupiers will get a chance to rate SA’s commercial and industrial property sectors against 46 world cities with the release of international brokerage firm CBRE’s latest research, which includes Johannesburg property markets.
Aimed at providing clients with an immediate view on prime rents and yields in the Europe, Middle East and Africa (EMEA) region, the CBRE EMEA Rents and Yields MarketView reported that most markets at this time are stable.
The report, which looks at cities in Europe, the Middle East and Africa included Johannesburg’s office, retail and industrial markets in the third quarter of 2013.
“A key finding is that investment markets across the region are recovering, thanks to increased capital flowing into the sector as well as improved investor sentiment,” says Broll Director of Broking, David Alcock, who contributed the SA data to the report.
With reasonable rents and attractive yields, the local market offers several key advantages to offer global tenants and owner-occupiers.
But as Alcock points out, global comparisons must be considered in light of local market differences.
“SA uses annual rental escalations, which many other markets do not,” he explains.
“And here, we typically quote gross rentals whereas net rentals are typically used overseas.”
Johannesburg’s office sector is one of the most competitively priced at €164/m²/year, or some R175/m²per month.
“Johannesburg ranks in the same range as cities like Belgrade in Serbia, or Zagreb in Croatia,” says Alcock.
Office rents have shown a six percent increase quarter-on-quarter and yields stand at some eight percent.
The priciest cities for office space are Paris, France at €800/m²/year and Geneva, Switzerland at €785/m²/year.
Local retail space fetches an average €224/m²/year, significantly more competitive than the region’s most expensive shopping destinations like London’s West End at €10,140/m²/year or Paris at €11,340/m²/year.
Retail yields are holding steady at 7,25 percent.
Industrial rentals in Johannesburg are significantly more in line with other EMEA cities, coming in at €56/m²/year.
“That’s very much in line with cities like Vienna, Austria or Copenhagen, Denmark,” he adds.
Johannesburg industrial yields average at 8,50 percent.
For more information view CBRE’s EMEA Rents and Yields MarketView Q3 2013